F1PART 8AProfits arising from the exploitation of patents etc
CHAPTER 3Relevant IP profits F10: cases mentioned in section 357A(7): no income from new IP
Words in Pt. 8A Ch. 3 heading inserted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 9 para. 3
Election for small claims treatment
357CLCompanies eligible to elect for small claims treatment
1
A company may F12make an election under this section for small claims treatment for an accounting period if condition A or B is met in relation to the accounting period.
2
Condition A is that the aggregate of the amounts of qualifying residual profit of each trade of the company for the accounting period does not exceed £1,000,000.
3
Condition B is that—
a
the aggregate of the amounts of qualifying residual profit of each trade of the company for the accounting period does not exceed the relevant maximum, and
b
the company did not take Step 6 in section 357C(1) or 357DA(1) for the purpose of calculating the relevant IP profits of any trade of the company for any previous accounting period beginning within the relevant 4-year period.
4
In subsection (3)(b) “the relevant 4-year period” means the period of 4 years ending immediately before the accounting period mentioned in subsection (3)(a).
5
If F2no other company is a related 51% group company of the company in the accounting period, the relevant maximum is £3,000,000.
6
7
For an accounting period of less than 12 months, the relevant maximum is proportionately reduced.
8
Any amount of qualifying residual profit of a trade of the company that is not greater than nil is to be disregarded for the purposes of this section.
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357CMSmall claims amount
1
This section applies where a company F13makes an election under section 357CL for small claims treatment for an accounting period.
2
The small claims amount in relation to each trade of the company for the accounting period is—
a
if the amount in subsection (3) is lower than the small claims threshold, 75% of the qualifying residual profit of the trade for the accounting period;
b
in any other case, the amount given by—
where—
SCT is the small claims threshold, and
T is the number of trades of the company.
3
The amount referred to in subsection (2)(a) is—
where QRP is the aggregate of the amounts of qualifying residual profit of each trade of the company for the accounting period (but see subsection (4)).
4
Any amount of qualifying residual profit of a trade of the company that is not greater than nil is to be disregarded for the purposes of subsection (3).
5
If F6no other company is a related 51% group company of the company in the accounting period, the small claims threshold is £1,000,000.
6
7
For an accounting period of less than 12 months, the small claims threshold is proportionately reduced.
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Pt. 8A inserted (with effect in accordance with Sch. 2 paras. 7, 8 of the amending Act) by Finance Act 2012 (c. 14), Sch. 2 para. 1(1)