758 Relief for expenses

Summary

The section provides for the write-off of various fees and expenses incurred in connection with devising a patented invention and of the fees and expenses incurred in connection with obtaining the grant of a patent or the extension of the term of a patent.

Details

Expenses of traders

(1) Expenses incurred for the purposes of a trade in taking out a patent or in obtaining an extension of the term for an existing patent can be written off as a deduction in computing the profits or gains of the trade. The provision, therefore, overrides section 81 which generally prohibits the write-off of such expenses.

Expenses of non-traders

(2) Where a non-trader incurs any expense in connection with the grant or maintenance of a patent or in obtaining an extension of the term of a patent, an allowance equal to the amount of the expenses is to be made to that person for the chargeable period in which those expenses are incurred. This allowance can be offset against patent income for that chargeable period and, in so far as any balance remains, can be carried forward to future chargeable periods years for set-off against patent income. Expenditure in connection with the “maintenance” of a patent relates to the ordinary renewal fees payable periodically during the term of a patent together with any related agents’ charges.

Expenses of inventors

(3) There is also provision for an allowance to be given to the actual devisor of a patented invention for expenses incurred in working out and perfecting the invention. The allowance is to be made for the chargeable period in which those expenses are incurred.

Relevant Date: Finance Act 2019