Income Tax (Trading and Other Income) Act 2005 section 26

Expenses connected with patents, designs and trade marks [ITTOIA 2005 Sch 2 para 26]

Section 26 provides transitional relief for trade-related fees connected with patents, designs or trade marks that were incurred but unpaid before the 2005-06 tax year and were never included in any prior profit calculation.

• Applies to fees incurred for trade purposes in connection with patents (section 89) or designs and trade marks (section 90) that have not yet been paid
• The fees must have been incurred in an accounting period that does not overlap with the basis period for 2005-06 or any subsequent tax year
• The fees must not have already been taken into account in calculating trade profits for any tax year
• Where all conditions are met, a deduction is allowed in the accounting period in which the fees are actually paid