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Profits From Patents – Reduce UK Corporation Tax to 10%!

Profits From Patents – Reduce UK Corporation Tax to 10%!


Profits From Patents – Reduce UK Corporation Tax to 10%!

Under the Patent Box regime, published in the UK Finance Act 2012, corporation tax can be reduced to 10% on profits derived from patents.

Worldwide profits from any product of which even a part is protected by one or more patents will qualify.

This tax relief is claimable from the year in which a patent grants. Since grant of a patent can take several years we recommend that immediate action be taken to review current and proposed product lines, and the patents or patent applications which cover them, to identify gaps in protection. We will be pleased to assist in this exercise and we have considerable expertise in accelerating the grant of pending applications.

Qualifying income and profits for the period between application and grant of a patent (up to a maximum of 6 years) will also be taken into account provided a statement is included in your tax returns from the date of the patent application noting that Patent Box relief will be claimed.

Patents qualify if they are granted by the UK Intellectual Property Office, the European Patent Office and some national offices of the EU. If you do not own the patent you can qualify by having an exclusive licence provided you have made a significant contribution to the creation or development of the product.

Profits which qualify for this relief can be calculated by a formula which once established can be used repeatedly, although for larger and more complex claims bespoke calculations may be needed and may be advantageous.

The Patent Box comes into effect on 1 April 2013 with 60% of the relief applicable from that day and the rest being phased in over 5 years.

We recommend that you act now to maximise the benefit to your company.

WP Thompson can help you:

- by reviewing your existing patent portfolio to identify qualifying rights;

- by reviewing your proposed product lines to identify patentable subject matter;

- by working with you to develop future patent filing strategies to maximise this benefit;

- by guiding and accelerating the progress of patent applications;

- to review existing product lines to identify added value developments which may be patentable.

Contact us today!