Businesses carrying on a trade of exploiting patents are charged to tax on profits from the sale of such rights as trading income. The corporate tax treatment of intangible assets, including intellectual property, acquired or created on or after 1 April 2002 is set out in the corporate intangible regime as detailed in Division D1.6.
The question of whether a business or indeed an individual is actually carrying on a trade of exploiting patents may arise. Rees Turbo Development Syndicate Ltd1 concerned a company whose business was the exploitation of patents by licensing. It was held that the company carried on a trade in patents and profits
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