Commentary on Sections Changes in partnership Section 1272: Sale of patent rights: effect of later cessation of trade
3252.This section sets out what happens when there has been a sale of patent rights to which the previous section applied and the last corporate partner leaves the firm. It is based on section 525 of ICTA. The corresponding rule for income tax is in section 862 of ITTOIA. See also paragraph 32463246 of this commentary about the effect of Part 8 of this Act and Change 89 in Annex 1.
3253.Subsection (2) sets out how the “rolled-up” charge is split between the current partners on cessation of the trade. As in section 525(4) of ICTA, the charge is made on the persons who are partners immediately before the cessation. Otherwise, the charge would be allocated by reference to the profit-sharing arrangements in the whole of the final accounting period. Schedule 1 to this Act amends section 862 of ITTOIA to clarify how the rule works for income tax.