Income Tax (Trading and Other Income) Act 2005 section 600

Relief for expenses: patent income

Section 600 provides relief for two categories of expenses connected with patents: the costs an inventor incurs in devising an invention, and the costs of applying for, maintaining or extending a patent.

• Inventor's expenses cover costs incurred by an individual (alone or jointly) in devising an invention for which a patent has been granted, provided those costs are directly attributable to the inventive work
• Patent application and maintenance expenses cover costs of obtaining, maintaining or extending a patent, or costs relating to a rejected or abandoned patent application, but only where those costs are not incurred for the purposes of a trade carried on by the person claiming relief
• Relief for patent application and maintenance expenses is only available if those expenses would have qualified as an allowable deduction in calculating trade profits, had they been incurred for trading purposes
• No relief is available under this section for any expenses that already receive relief elsewhere, whether under section 582 (which deals with deductions in calculating income taxable as patent royalties) or under any other provision of the Tax Acts