Commentary on Sections Overview Chapter 3: Sales of Patent Rights Section 912: Charge to tax on profits from sales of patent rights
2308.This section applies the charge to corporation tax on income to capital sums from the sale of patent rights. It is based on sections 524 and 533 of ICTA. The corresponding rule for income tax is in section 587 of ITTOIA.
2309.Section 524(5) of ICTA is not rewritten because it does not appear to add anything to the proposition set out in section 5(3) of this Act (which defines the scope of the charge to corporation tax on a non-UK resident company trading in the UK through a permanent establishment in the UK). Any non-capital proceeds of the sale of patent rights will be amounts of income forming part of a non-UK resident company’s chargeable profits by virtue of section 19(3)(b) of this Act (which defines the chargeable profits of a non-UK resident company). So the company will be within the charge to corporation tax in respect of such amounts.