Section 588 | Income charged under section 587

(1)A seller's profits from the sale of the whole or part of patent rights are—

(a)any capital sum comprised in the proceeds of the sale, less

(b)the deductible costs.

(2)The deductible costs are—

(a)the capital cost (if any) of the rights sold, and

(b)any incidental expenses incurred by the seller in connection with the sale.

(3)If—

(a)the seller acquired the rights sold, or the rights out of which they were granted, by purchase,

(b)the seller has previously sold part of the purchased rights, and

(c)the proceeds of that sale, after deducting any incidental expenses, consisted wholly or partly of a capital sum,

the capital cost is reduced by that capital sum.

(4)References in this Chapter to the capital cost of patent rights are to any capital sum included in any price paid by the seller to purchase—

(a)the rights, or

(b)the rights out of which they were granted.

(5)This section needs to be read with sections 600 (relief for expenses: patent income) and 603 (contributions to expenditure).