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.

915 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 UK resident, and

(b) receives the proceeds of sale in instalments.

(2) The appropriate fraction of the amount chargeable in respect of each instalment is taxed—

(a) in the accounting period in which the company receives the instalment (“the period of receipt”), and

(b) in successive accounting periods, until the expiry of the 6-year period beginning at the start of the period of receipt.

(3) The appropriate fraction of the amount chargeable in respect of an instalment is the same fraction of that amount as the accounting period in question is of 6 years (or, in the last period, such smaller fraction of the amount as has not already been taxed).

(4) The company may elect that the whole of any instalment is to be taxed instead in the period of receipt.

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