Corporation Tax Act 2009 section 917

Non-UK resident companies: proceeds of sale received in instalments

Section 917 explains how non-UK resident companies are taxed on capital sums from the sale of patent rights when the proceeds are received in instalments, including an option to spread the tax charge over six years.

• Each instalment received by a non-UK resident company from a patent rights sale is normally taxed in the accounting period it is received.
• The company may elect to spread the taxable amount of any instalment rateably over the accounting periods ending 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 instalment was received, and only applies to periods where the company is within the charge to corporation tax on non-capital proceeds of the sale.
• Any necessary repayments and additional assessments will be made across the affected accounting periods to give effect to the election, subject to adjustments where tax has already been deducted.