Capital Allowances Act 2001 section 465

Future patent rights

Section 465 ensures that expenditure on the right to acquire patent rights for an invention not yet patented is treated in the same way as expenditure on purchasing existing patent rights, for both the buyer and the seller.

• Expenditure on obtaining a right to acquire future patent rights counts as expenditure on the purchase of patent rights for capital allowances purposes.
• If the person who paid for that right subsequently acquires the patent rights themselves, the original expenditure is treated as having been spent on purchasing those rights.
• "Future patent rights" means rights relating to an invention where the patent has not yet been granted — without this provision, no relief would be available to the payer.
• The seller receives corresponding treatment: any sum received from the buyer is treated as proceeds from a sale of patent rights, even though no patent has yet been granted.