Capital Allowances Act 2001 section 95

The writing-down period

Section 95 sets out how to determine the writing-down period over which patent expenditure can be written off, including the basic 17-year rule and two alternative rules for specific circumstances.

• The basic writing-down period is 17 years, starting at the beginning of the chargeable period in which the qualifying expenditure is incurred.
• If patent rights are purchased for a specified period, the writing-down period is the shorter of 17 years or the number of years in that specified period.
• If the patent rights begin one complete year or more after the patent commenced and the rights are not for a specified period, the writing-down period is 17 years minus the number of complete years already elapsed since the patent commenced — with a minimum of one year.
• Pre-trade expenditure on patent rights is treated as incurred on the first day the trade is carried on, unless all the rights have already been sold by that date.