Corporation Tax Act 2009 section 919

Deduction of tax from payments to non-UK resident companies

Section 919 deals with the withholding of income tax from payments made to non-UK resident companies that are liable to tax on profits from selling patent rights.

• When a non-UK resident company sells the whole or part of any patent rights and is taxable on the resulting profits, income tax must be deducted at source from the payments made to it.
• Any deduction the company is allowed for the original capital cost of acquiring the patent rights does not reduce the amount of income tax that must be withheld from the payment.
• If the company elects to spread the tax charge over several years — whether the sale proceeds are received as a lump sum or in instalments — this election has no effect on the amount of income tax withheld.
• The income tax withholding obligation is calculated on the gross payment amount, regardless of any reliefs or elections the non-UK resident company may claim for corporation tax purposes.