Taxes Consolidation Act 1997 section 755

Annual allowances for capital expenditure on purchase of patent rights

Section 755 provides for writing-down allowances in respect of capital expenditure incurred on the purchase of patent rights, with the allowances generally spread over a 17-year period or the remaining life of the patent if shorter.

• A person who incurs capital expenditure on purchasing patent rights may claim writing-down allowances, provided the allowance relates to a trade or the patent income is liable to Irish tax.
• The standard writing-down period is 17 years, but this is reduced where the rights are acquired for a shorter specified period or where the patent has already been running for one or more complete years.
• Pre-trading expenditure on patent rights is treated as incurred on the first day of trading, unless the purchaser sells all the rights before trading begins.
• From 7 May 2009, the section ceased to apply to companies within the charge to corporation tax, but a company could elect for the relief to apply to expenditure incurred between 7 May 2009 and 7 May 2011.