Changes to the patent box regime

FA 2016 introduced major changes to the patent box regime, following recommendations made by the OECD to implement an internationally developed framework for preferential IP regimes to address base erosion and profit shifting (BEPS). The commentary in this guidance note applies to the calculation of relevant IP profits of a company where:

1. •

   the accounting period begins before 1 July 2021

2. •

   the company is not a new entrant, ie the company made a patent box election for an accounting period beginning before 1 July 2016, or it has not elected to be treated as a new entrant, and

3. •

   none of the relevant IP income brought into account in calculating relevant IP income is attributable to ‘new’ qualifying IP, ie IP granted, assigned or licensed to the company on or after 1 July 2016

CTA 2010, s 357C

The Calculating relevant IP profits ― not a new entrant but new IP rights before 1 July 2021 guidance note sets