Income Tax (Trading and Other Income) Act 2005 section 608G

Section 608F: apportionment of amounts

Section 608G sets out the rules for apportioning income where a person receives amounts relating to intangible property that enables, facilitates or promotes UK sales, but that property also relates to other (non-UK) sales or other matters.

• Where income from intangible property relates partly to UK sales and partly to other sales or other matters, an apportionment is required to identify the UK-derived portion.
• The UK-derived amount is the proportion that is just and reasonable in all the circumstances.
• The default apportionment method uses the formula X / (X + Y), where X is the value of UK sales and Y is the value of all other sales.
• The default formula applies unless it can be demonstrated that a different basis of apportionment would be just and reasonable.