Corporation Tax Act 2009 section 920

Adjustments where tax has been deducted

Section 920 deals with how adjustments are made when tax has already been deducted at source from patent rights payments made to non-UK resident companies, requiring that any necessary corrections be handled through tax repayments.

• When tax has been deducted from a payment to a non-UK resident company under the withholding tax rules for patent rights sales, adjustments may be needed
• Adjustments may arise because the non-UK resident company is subject to corporation tax rather than income tax on the patent sale proceeds
• Adjustments may also arise where the non-UK resident company has elected to spread the taxation of sale proceeds over six years, whether received as a lump sum or in instalments
• All such adjustments must be made by way of repayment of the tax that was deducted, rather than by any other method of correction