The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
Major changes to the patent box regime were made by FA 2016 to bring it into line with the outcome of the OECD’s recommendations on tackling harmful tax practices and preferential IP regimes. See the Overview of the Patent Box guidance note for details. The commentary in this guidance note applies to the calculation of relevant IP profits where the company is not a new entrant, with no new qualifying IP rights for accounting periods beginning before 1 July 2021.
The patent box legislation sets out seven steps that should be followed in order to calculate the qualifying IP profits to which the reduced rate of corporation tax may be applied. These steps are set out in the Calculating relevant IP profits ― existing claimants with no new IP rights guidance note, which should be read in conjunction with this note.
At step 5 of the qualifying IP profits calculation, a qualifying company is able to adopt a simpler, more formulaic approach to determine how much of the qualifying residual profit (QRP) represents profit from qualifying IP rights and how much relates to brand and marketing assets. The brand and marketing profit element
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