Income Tax (Trading and Other Income) Act 2005 section 582

Deductions in calculating certain income charged under section 579

Section 582 sets out the rules for deducting expenses from intellectual property income (such as royalties) that is charged to tax under section 579, excluding annual payments.

• Expenses wholly and exclusively incurred to generate the intellectual property income are deductible, and where an expense serves more than one purpose, the identifiable part or proportion relating solely to generating that income may be deducted
• Expenses that would not be allowable as deductions in calculating the profits of a trade are similarly not deductible against this income
• Expenses for which relief is already given under any other provision of the Income Tax Acts cannot also be deducted under this section
• Relief for patent-related expenses under section 600 is given in addition to, not instead of, any relief available under this section