Corporation Tax Act 2010 section 357BLE

Qualifying expenditure on acquisition of relevant qualifying IP rights

Section 357BLE defines what counts as qualifying expenditure when a company acquires relevant qualifying IP rights, and how that expenditure feeds into the R&D fraction calculation for the Patent Box regime.

• Qualifying expenditure covers payments for the assignment of a relevant qualifying IP right, the grant or transfer of an exclusive licence over such a right, or the disclosure of an item or process from which the company subsequently obtains such a right.
• Only expenditure incurred during the relevant period counts towards the calculation.
• Where a company makes a series of payments relating to a single assignment, licence or disclosure, all payments in the series are treated as having been made on the date of the first payment.
• The meaning of "relevant qualifying IP right" depends on whether the company's income sub-stream is an individual IP right sub-stream, a product sub-stream, or a process sub-stream, and in each case the right must relate to the item or process generating the income in that sub-stream.