Corporation Tax Act 2009 (c. 4)

Part 9 U.K. Intellectual property: know-how and patents

Chapter 3 U.K. Sales of patent rights

Spreading of charge to tax U.K.

917 Non-UK resident companies: proceeds of sale received in instalments U.K.

(1) This section applies if a company liable for tax under section 912—

(a) is not UK resident, and

(b) receives the proceeds of sale in instalments.

(2) The amount chargeable in respect of each instalment is taxed in the accounting period in which the company receives the instalment (“the period of receipt”).

(3) The company may, for any instalment, elect instead that the amount chargeable in respect of the instalment—

(a) is to be treated as arising rateably in the accounting periods ending 6 years from the start of the period of receipt, and

(b) is taxed accordingly.

(4) An election under subsection (3) must be made within the two-year period beginning at the end of the period of receipt.

(5) The election has effect in relation to accounting periods of the company during which the company is within the charge to corporation tax in respect of any proceeds of the sale not consisting of a capital sum.

(6) Such repayments and assessments are to be made for each of the accounting periods affected as are necessary to give effect to the election.

(7) Subsection (6) is subject to the qualifications in section 920 (adjustments where tax has been deducted).