The current Patent Box regime was introduced in April 2013 and many companies have made claims. Patent Box provides effectively a 10% tax rate to reward UK companies that are exploiting patented IP rights.
Concerns were raised a few years ago that Patent Box and other Intellectual Property (IP) regimes could be considered harmful tax practices if companies are able to benefit without good substance in the relevant country. Following a review of all IP Regimes, a modified UK IP regime (Nexus) will apply, phased in from June 2016. The new regime will limit benefits based on the proportion of relevant UK R&D undertaken as a proportion of global R&D. Companies should take action to understand whether they can qualify for the old and/or new regime and the benefits of each. The existing regime will be closed to new entrants from June 2016.
Angela Browning, our Patent Box leader, provides an update on the final patent box Nexus legislation and how it interacts with the current Patent Box Regime.
Tax Director, PwC United Kingdom
Tel: +44 (0) 20 721 34942