Taxes Consolidation Act 1997 section 757

Charges on capital sums received for sale of patent rights

Section 757 provides that the sale of patent rights for a capital sum is taxed under Schedule D Case IV, with the charge generally spread over six years for both resident and non-resident sellers.

• Where an Irish-resident person sells patent rights for a capital sum, the proceeds are charged to tax under Case IV of Schedule D, spread in equal sixths over the chargeable period of receipt and the five succeeding chargeable periods
• A non-resident who sells rights under an Irish patent for a capital sum is also charged under Case IV, but the purchaser must deduct income tax at the standard rate from the payment as if it were an annual payment
• Credit is given for the acquisition cost of the patent rights when calculating the taxable capital sum, reduced by any capital sum previously received from selling part of the rights during the ownership period
• The section does not apply where the sale results in the purchaser being entitled to have their title as proprietor of the patent registered, or being absolutely entitled as against the proprietor — in effect, outright sales of patents are excluded