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Capital Allowances Act 2001

Chapter 5: Supplementary provisions

1706.This Chapter deals with limits on qualifying expenditure in certain cases and minor provisions that do not naturally fit into earlier Chapters.

1707.Section 481 deals with limits on qualifying expenditure if:

  • the purchase of patent rights is from a connected person; or

  • a main benefit is to get patent allowances.

1708.Section 482 deals with certain payments by a government if the payments may not be under a licence of patent rights.

1709.Section 483 defines “patent income”.

Section 481: Anti-avoidance: limit on qualifying expenditure

1710.This section is based on section 521(5) and (6) of ICTA. It puts limits on the amount of qualifying expenditure if a person purchases patent rights from a connected person or as part of a transaction that has as a main benefit the obtaining of allowances.

Section 482: Sums paid for Crown use etc. treated as paid under licence

1711.This section is based on section 533(4) of ICTA. It treats certain sums paid by a government in relation to a patented invention as if the payments were made under a licence. This allows the sections in this Part referring to sales of patent rights to operate on such payments.

Section 483: Meaning of “income from patents”

1712.This section is based on section 533(1). It defines “income from patents”. That term is used in sections 479 and 480 to describe the amount against which allowances in respect of qualifying non-trade expenditure can be offset.

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