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Patent allowances—balancing allowances

When calculating patent allowances, a balancing allowance can only arise in the final chargeable period. If, in that period, AQE exceeds TDR (see B3.603), the excess is a balancing allowance and no writing-down allowance is given for that period¹.

The final chargeable period is as follows²:

1. Ìý

   •ÌýÌýÌýÌý for a pool to which qualifying trade expenditure (see B3.603) has been allocated, the chargeable period in which the trade is permanently discontinued, or

2. Ìý

   •ÌýÌýÌýÌý for a pool to which qualifying non-trade expenditure (see B3.603) has been allocated, the chargeable period in which the last of the patent rights on which the person has incurred qualifying non-trade expenditure comes to an end without any of those rights being revived, or is wholly disposed of

Example 1

On 18 November 2019, E bought new patent rights at a cost of £5,000 for use in their trade. On 1 March 2023,