help with Business Taxation Devolved

System
System Posts: 100,534 🤖 Admin 🤖
edited 10:28AM in AAT student discussion
Is there anyone out there who can explain how to do Patent Royalties with the Schedule D1 Computation and then when you gross up and when you don't. <BR>When do you add and when less? <BR>Tax Suffered when gross and when don't?<BR>Where to include in the CT600 form. <BR><BR>I was stumped on this in the Personal Tax Devolved last year and hey still have not got it and the DA is fast approaching and I need to get my head round it all.<BR><BR>Thanks<BR><BR>Sue

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    help with Business Taxation Devolved

    Patent Royalties received are known as UFII (unfranked investment income ). If this was received from another company you need to deduct the income when computing your Sch D Case 1 and add it back in just before "Profits" on your CT computation. Royalties will be received net of income tax at 22% BUT you show them gross. The CT61 return will be handled by the remitting company.<BR><BR>If you pay it out then it is a 'charge to income' below "Profits" in your CT computation. Deduct the 22% income tax BUT show payment gross. You complete the CT61 return.<BR><BR>If you get this in a question just look to see whether the tax credit is mentioned. If it isn't you need to gross up.<BR><BR>David
  • System
    System Posts: 100,534 🤖 Admin 🤖
    help with Business Taxation Devolved

    Thanks. That explains it nice and easily - why can't the text books say this! "Exam" is on Thursday so need to spend tomorrow on this to ground it in. Again Thanks

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