DB pensioner and filing patents - can I claim filing costs against my income to reduce tax?

itsmeagain

Hi. I've been retired from a PAYE job for 1 year and claiming my DB pension (age 56)  @ circa 30kPA.
I used to file many patents via my employer, so the costs were managed by them.
Since retiring, I've just filed my own personal patent application in the hope to get it granted and sell/license the idea (in future years).
In the mean time, the drafting & filing of these patents costs me money (upfront of any potential return).
I wish to know if I can offset this expense against my current income to reduce tax, and if so, the easiest way of achieving this please?

sheramber

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca75300

Where:

• a non trader pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, and
• if those fees or expenses had been paid or incurred for the purposes of a trade they would have been allowable in calculating the profits of the trade,

the non-trader is given an allowance equal to the expenditure incurred. The allowance is made for the chargeable period in which the fees or expenses are paid or incurred and can only be offset against patent income.

itsmeagain

sheramber said:

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca75300

Where:

• a non trader pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, and
• if those fees or expenses had been paid or incurred for the purposes of a trade they would have been allowable in calculating the profits of the trade,

the non-trader is given an allowance equal to the expenditure incurred. The allowance is made for the chargeable period in which the fees or expenses are paid or incurred and can only be offset against patent income.

Thanks. Do you understand the logic of the last paragraph? The main expenditure incurred is during application. The income from the patent is likely to be several years later following grant (not the same tax period)?

[Deleted User]

itsmeagain said:

sheramber said:

https://www.gov.uk/hmrc-internal-manuals/capital-allowances-manual/ca75300

Where:

• a non trader pays any fees or incurs any expenses in connection with the grant or maintenance of a patent, and
• if those fees or expenses had been paid or incurred for the purposes of a trade they would have been allowable in calculating the profits of the trade,

the non-trader is given an allowance equal to the expenditure incurred. The allowance is made for the chargeable period in which the fees or expenses are paid or incurred and can only be offset against patent income.

Thanks. Do you understand the logic of the last paragraph? The main expenditure incurred is during application. The income from the patent is likely to be several years later following grant (not the same tax period)?

From the next page:

Where the patent rights were, or were to be, used for the purposes of the trade the allowance is made to the trader as a deduction in charging the profits of the trade. In any other case the allowance is deducted from or set off against income from patents. If the allowance is more than the income from patents the excess is carried forward and deducted from patent income in future years.