Corporation Tax Act 2009 section 916

Non-UK resident companies: proceeds of sale not received in instalments

Section 916 deals with how non-UK resident companies are taxed on capital sums from the sale of patent rights when the sale proceeds are received as a lump sum rather than in instalments, and provides an option to spread the tax charge over six years.

• Where a non-UK resident company receives a lump sum from a patent rights sale, the full chargeable amount is normally taxed in the accounting period the proceeds are received.
• The company may elect to spread the chargeable amount equally over the accounting periods falling within six years from the start of the period of receipt.
• The election must be made within two years of the end of the accounting period in which the proceeds were received.
• If the company ceases to be within the charge to corporation tax before the six-year spreading period ends, the spreading is curtailed and earlier periods are revised accordingly.