Commentary on Sections Overview Chapter 3: Sales of Patent Rights Section 917: Non-UK resident companies: proceeds of sale received in instalments
2322.This section sets out how non-UK resident companies are taxed on capital sums from the sale of patent rights if the sale proceeds are received in instalments. It is based on section 524 of ICTA. The corresponding rule for income tax is in section 592 of ITTOIA.
2323.Subsection (2) makes explicit what is implicit in the source legislation.
2324.Subsection (4) states the time limit for elections under subsection (3). The reference in section 524(6) of ICTA to “the Board” has not been reproduced and this section does not specify to whom the election must be made. But the general rules about claims and elections in Schedule 18 to FA 1998 require elections to be made in a return or, if that is not possible, to “an officer of Revenue and Customs” in accordance with Schedule 1A to TMA. So Change 149 in ITTOIA is reproduced to bring the income and corporation tax codes back into line. See Change 1 in Annex 1.
2325.The note on section 916(5) is also relevant to subsection (5) of this section.
2326.Section 524(10) of ICTA is not rewritten. Section 524 of ICTA prescribes particular tax treatments with alternatives available by election. Section 524(10) of ICTA requires claims for relief under section 524 to be made to the Board. The claim relates to the spreading over six years of capital sums received from the sale of patent rights for the purposes of charging the sum to tax. As spreading is automatic for UK resident companies, the claim can be relevant only to non-UK resident companies. However, section 524(6) of ICTA, which deals with spreading rules for non-UK resident companies, refers to an election the rules for which are fully stated in that subsection and rewritten in sections 916 and 917. Section 524(10) of ICTA is, therefore, superfluous.