What is Patent Box?

The Patent Box is a corporation tax relief for relevant intellectual property profits of a company’s trade. Patent Box commenced on 1 April 2013.  Patent Box relief is not automatic and therefore a company must elect for Patent Box to apply if it considers that it is eligible to make a claim.

The relief will ultimately tax relevant intellectual property profits of a company’s trade at a flat rate of 10% but the relief is being phased in over a 5 year period from 1 April 2013 and so for the first year only 60% of the relevant profits will be taxed at 10%, 70% in year 2 and so on until the full 100% of relevant profits is taxed at 10% in year 5.

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