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HMRC internal manual

Capital Allowances Manual

Patents: Expenses: Fees

ICTA88/S83 (a) - (b), ICTA88/S526 (1), ICT88/S528 (2) - (3), ITTOIA/S600 - S601

Fees and expenses incurred in obtaining the grant or the extension of the term of a patent for the purposes of a trade are admissible as a deduction in computing the profits of the trade. Fees and expenses incurred in connection with unsuccessful applications for patents for the purposes of a trade are also allowable.

Fees incurred for the renewal of a patent for the purposes of a trade are allowable. Agents’ charges in connection with the renewal of a patent are allowable if the renewal fees are allowable.

Where:

  • a non trader pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, and
  • if those fees or expenses had been paid or incurred for the purposes of a trade they would have been allowable in calculating the profits of the trade,

 

the non-trader is given an allowance equal to the expenditure incurred. The allowance is made for the chargeable period in which the fees or expenses are paid or incurred and can only be offset against patent income.