Income Tax (Trading and Other Income) Act 2005 section 603

Contributions to expenditure

Section 603 deals with how expenditure claimed as relief against intellectual property income is restricted where that expenditure has been funded by someone else, such as a public body or another person.

• Where expenditure related to intellectual property income has been met, directly or indirectly, by a public body or by anyone other than the person claiming the relief, that expenditure is treated as not having been incurred by the claimant.
• A "public body" means the Crown, any government, local authority or other public authority, whether based in the United Kingdom or elsewhere.
• This restriction does not apply to incidental expenses incurred by a seller of patent rights, such as legal or professional fees associated with the sale.
• There is a further exception to this rule where the contribution was not made by a public body and was not itself eligible for tax relief in the hands of the contributor.