Corporation Tax Act 2010 section 357CA

Total gross income of a trade

Section 357CA defines how to calculate the "total gross income" of a company's trade for Patent Box purposes, by aggregating amounts under five specified categories while excluding finance income.

• Total gross income is the aggregate of five categories: revenue recognised in the accounts, compensation receipts, adjustments on change of accounting basis, proceeds from intangible fixed assets, and profits from sales of patent rights
• Finance income is specifically excluded from total gross income
• Revenue must be both recognised under generally accepted accounting practice (GAAP) and brought into account for tax purposes — even where a company does not actually prepare GAAP-compliant accounts, the GAAP standard still applies as if it had
• Compensation, basis-change adjustments, intangible asset proceeds, and patent rights profits are only included to the extent they have not already been captured as revenue under the first category