Taxes Consolidation Act 1997 section 1011

Provision as to charges under section 757

Section 1011 provides for the allocation among partners of a charge to tax on capital sums received for the sale of patent rights by a partnership.

• Where a partnership sells patent rights for a capital sum, each partner is charged individually on their appropriate share of the overall partnership charge rather than the partnership being charged collectively.
• The charge arises under section 757, which taxes the seller of patent rights on one-sixth of the capital sum in the year of receipt and one-sixth in each of the following five years.
• Each partner's appropriate share of the charge is calculated by reference to the profit-sharing ratios applicable to each trading period falling within the relevant tax year.
• Where partners can demonstrate that the standard apportionment method would cause hardship, Revenue may apply a revised basis of allocation on receipt of written representations.