Section 601 | How relief is given under section 600

(1)This section sets out how relief for expenses is given where a person makes a claim under section 600.

(2)The amount of the expenses must be deducted from or set off against the person's income from patents for the tax year in which the expenses were incurred.

(2A)The deduction or set-off is given effect at Step 2 of the calculation in section 23 of ITA 2007.^F1

(3)If the amount to be allowed is greater than the amount of the person's income from patents for that tax year, the excess must be deducted from or set off against the person's income from patents for the next tax year, and so on for subsequent tax years, without the need for a further claim.

(4)In this section “income from patents” means—

(a)royalties or other sums paid in respect of the use of a patent (whether chargeable under this Chapter or otherwise),

(b)amounts on which tax is payable under section 587, 593 or 594, and

(c)amounts on which tax is payable under—

(i)section 472(5) of CAA 2001 (patent allowances: balancing charges), or

(ii)paragraph 100 of Schedule 3 to that Act (balancing charges in respect of pre-1st April 1986 expenditure on the purchase of patent rights).

(5)In this section references to a person's income from patents are to the income after any allowance has been deducted from or set off against it under section 479 of CAA 2001 (certain allowances against income from patents).