There is general guidance as to the meaning of a patent and the
legal background at CA75000 onwards. This chapter does not seek to
duplicate the guidance given there.
For companies holding intangible assets, such as patent
rights, which they created or acquired from an unrelated party
after 31 March 2002, the guidance in the CA manual is no longer
current, and instead you should consult the CIRD manual for details
of the taxation treatment of expenditure and receipts relating to
these assets. (For more information about the new CT regime for
intangible assets see
BIM35500 onwards.) The guidance in the
CA manual is still current for assets held by individuals and
partnerships and for assets acquired by companies before 1 April
2002.
In general, as regards the allowability of fees and expenses
incurred in obtaining the grant of, or an extension of the term of,
a patent, see CA75300. It should be noted that ICTA88/S83 also
allows a deduction in respect of costs where a patent application
has been refused or abandoned, so long as the application was made
for the purposes of the trade.
As regards revenue expenses incurred in devising a patent,
see CA75310, and for companies consider also the possible
application of research and development reliefs which take
precedence if relevant (CIRD10500), or the applicability of the
intangible asset regime BIM35500 onwards. For capital expenses, you
again need to consider whether intangible asset treatment is
appropriate for companies, and bear in mind the possible
availability of research and development allowances (CA60000
onwards).
