Sale of patents by companies: long-term capital gains regime applies

Article 14 of the 2008 Finance Act applies the long-term capital gains regime (then a reduced 15% rate) to gains on the sale of a patent, patentable invention or industrial manufacturing process by a company subject to corporate income tax, except between related companies. It also lets an individual inventor who contributes a patent to a company defer taxation of the gain until the shares received are sold, with a one-third reduction per year of holding beyond the fifth. Part I applies to financial years beginning on or after 26 September 2007, Parts II and III to contributions made from that date. The tax regime for patent income was overhauled in 2019.