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ARTICLE · 08 MARCH 2010

Patent Box

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The Chancellor, Alistair Darling, announced in the Pre-Budget Report on 9 December 2009 that he plans to introduce a so-called "patent box" which would give a favourable tax treatment to income derived from patents.

United KingdomTax
Peter Steiner
Peter Steiner
Mark Prinsley
Mark Prinsley
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Originally published 2 March 2010

Keywords: patent box, pre-budget report, Alistair Darling, income, patents, R&D

Introduction

  1. The Chancellor, Alistair Darling, announced in the Pre-Budget Report on 9 December 2009 that he plans to introduce a so-called "patent box" which would give a favourable tax treatment to income derived from patents.
  2. This new regime is part of a drive to make the UK more attractive to high-tech companies. It is hoped that the patent box will encourage these companies to locate their research and development ("R&D") functions in the UK to take advantage of the change which will be introduced in April 2013.
  3. A new 10% corporation rate will be applied to patent income from April 2013. It appears that the new tax rate will apply to income derived from patents which have been granted after the new legislation comes into force. The Government believes that the new tax rate, when taken alongside the UK's relatively low main corporation

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