Income Tax (Trading and Other Income) Act 2005 section 595

Deduction of tax from payments to non-UK residents

Section 595 sets out rules about how income tax must be deducted at source when a non-UK resident sells patent rights, ensuring that certain reliefs available to the seller do not reduce the amount of tax withheld from the payment.

• Applies when a non-UK resident is liable to tax on profits from selling all or part of any patent rights
• The deduction of capital costs allowed when calculating the seller's taxable profit does not reduce the amount of tax that must be withheld at source
• Any election by the seller to spread the sale proceeds over multiple tax years does not reduce the amount of tax withheld at source
• The full amount of tax must be deducted under section 910 of ITA 2007 regardless of these reliefs