Capital Allowances Act 2001 section 479

Persons having qualifying non-trade expenditure: income tax

Section 479 explains how capital allowances and charges relating to qualifying non-trade patent expenditure are given effect for income tax purposes.

• Allowances are deducted from or set off against the person's income from patents for the current tax year
• If the allowance exceeds patent income for the year, the excess carries forward and is set against patent income of subsequent tax years until fully used
• Charges are treated as income assessable to income tax, and section 483 treats such charges as income from patents, allowing them to be reduced by available allowances
• The allowance takes effect at Step 2 of the income tax calculation under section 23 of ITA 2007