Corporation Tax Act 2009 section 913

Profits charged under section 912

Section 913 explains how to calculate the taxable profit when a company sells all or part of its patent rights.

• Taxable profit is the capital sum received from the sale minus deductible costs (the original capital cost of the rights plus any incidental expenses of the sale)
• If the company previously bought the patent rights and has already sold part of them for a capital sum, the original capital cost must be reduced by that earlier capital sum
• The capital cost means any capital sum included in the price the company paid to purchase the rights, or the rights from which the sold rights were granted
• The calculation is also subject to rules on relief for expenses relating to patent income (section 924) and adjustments for third-party contributions to expenditure (section 926)