Capital Allowances Act 2001 section 468

Qualifying trade expenditure

Section 468 defines what counts as "qualifying trade expenditure" for the purposes of capital allowances on patent rights, and sets out rules for when that expenditure is treated as incurred.

• Qualifying trade expenditure is capital expenditure on purchasing patent rights for use in a trade that is within the charge to tax.
• The same expenditure cannot be counted as qualifying trade expenditure for more than one trade.
• Expenditure incurred before a trade begins is treated as if it were incurred on the first day the trade is carried on.
• The pre-trading rule does not apply if the person has sold all the patent rights before the trade actually starts.