Income Tax (Trading and Other Income) Act 2005 section 592

Further provision about elections for spreading: instalments

Section 592 deals with how non-UK residents who receive proceeds from the sale of patent rights in instalments are taxed, and how they can elect to spread each instalment over six tax years.

• Where a non-UK resident receives patent sale proceeds in instalments, each instalment is normally taxed in the tax year it is received.
• The recipient can elect to spread each instalment equally over six tax years — one-sixth taxed in the year of receipt and one-sixth in each of the following five tax years.
• The election must be made on or before the first anniversary of the normal self-assessment filing date for the tax year in which the instalment is received.
• Any necessary repayments and assessments will be made across the affected tax years, subject to adjustments where tax has already been deducted at source.