PART 8A

Profits arising from the exploitation of patents etc
CHAPTER 3

Relevant IP profits : cases mentioned in section 357A(7): no income from new IP

Election for small claims treatment

Companies eligible to elect for small claims treatment
357CL
1
A company may
make 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
no other company is a related 51% group company of the company
in the accounting period, the relevant maximum is £3,000,000.
6
If
one or more other companies are related 51% group companies of the company,
in the accounting period, the relevant maximum is—
(£ 3,000,000)/(1 + N)
where N is the number of
those related 51% group
companies in relation to which an election under
section 357A(1)
has effect for the accounting period.
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.
9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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)
Words in s. 357CL(5) substituted (with effect in accordance with Sch. 1 para. 21 of the amending Act) by Finance Act 2014 (c. 26), Sch. 1 para. 13(2)(a)
Words in s. 357CL(6) substituted (with effect in accordance with Sch. 1 para. 21 of the amending Act) by Finance Act 2014 (c. 26), Sch. 1 para. 13(2)(b)(i)
Words in s. 357CL(6) substituted (with effect in accordance with Sch. 1 para. 21 of the amending Act) by Finance Act 2014 (c. 26), Sch. 1 para. 13(2)(b)(ii)
S. 357CL(9) omitted (with effect in accordance with Sch. 1 para. 21 of the amending Act) by virtue of Finance Act 2014 (c. 26), Sch. 1 para. 13(2)(c)
Words in Pt. 8A Ch. 3 heading inserted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 9 para. 3
Words in s. 357CL(6) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 9 para. 10(3)
Words in s. 357CL(1) substituted (15.9.2016) by Finance Act 2016 (c. 24), Sch. 9 para. 10(2)