Patent Box Calculation

Patent Box Calculation

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I have a client company with the majority of their income being from patented products. During the year they sold a property realising a large profit on sale which is therefore included in the net profits of the company. 

Within the Patent Box calculation, the turnover percentage calculation is unaffected by the asset sale but when you get to the 'profits of the trade' I am unsure whether the profit on sale of assets should be included or excluded. As interest and rents received are excluded, it would seem logical that capital gains transactions should also be excluded but there is no specific mention of the latter in the HMRC guidance whereas there is for interest income.

Does anyone have any experience of this?

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By Anne Fairpo
23rd Jul 2015 11:36

Profits of the trade (chiming in a bit late)
"Profits of the trade" is intended to mean the profits subject to corporation tax on income (under ss35, 46 CTA 2009) and so should not generally include capital gains, where they are part of the profits of the company, but not the profits of the 'trade'.

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