Corporation Tax Act 2009 section 59

Patent royalties

Section 59 prohibits a deduction for royalties or other sums paid for the use of patents when calculating trading profits.

• No deduction is allowed for patent royalties or other payments made for the use of patents when calculating trading profits.
• For most patent royalties, this prohibition is overridden by the intangible fixed assets regime in Part 8 of the Act, which provides relief for trades and other commercial activities.
• The section remains relevant in a minority of cases where the intangible fixed assets regime does not apply — for example, where the royalty relates to an intangible asset that is not a fixed asset of the payer's trade.
• This section is based on the former rule in section 74(1)(p) of ICTA.