Capital Allowances Act 2001 section 466

Grant of licences

Section 466 explains how the acquisition and grant of patent licences are treated for the purposes of capital allowances on patent rights.

• Acquiring a licence over a patent is treated as a purchase of patent rights, enabling the licensee to claim capital allowances.
• Granting a licence over a patent is treated as a sale of part of the patent rights, potentially triggering disposal proceeds for the grantor.
• Granting an exclusive licence is treated as a sale of the whole of the patent rights, not merely a part.
• An exclusive licence is one that gives the licensee sole use of the rights, excluding the grantor and everyone else, for the remaining life of the patent.