Corporation Tax Act 2009 section 925

How relief is given under section 924

Section 925 explains the mechanics of how patent-related expense relief claimed under section 924 is applied against a company's patent income, including how any excess expenses are carried forward to future periods.

• Qualifying patent expenses are deducted from the company's patent income in the accounting period in which they were incurred.
• Where expenses exceed patent income for the period, the surplus carries forward automatically against patent income of subsequent accounting periods, without the need for a further claim.
• Patent income for these purposes includes royalties, profits from sales of patent rights, and patent-related balancing charges, but excludes any amount chargeable to income tax.
• Patent income must first be reduced by any capital allowances set against it before the expense relief under this section is applied.