On 6 December 2011 HMRC published its response to the June 2011 consultation on patent box together with draft legislation and a helpful technical note and guide to the draft legislation.
Under the proposed patent box regime worldwide profits, made from the exploitation of inventions protected by qualifying patents, will be eligible for a reduced rate of corporation tax of 10 percent from 1 April 2013. Qualifying income can be licence fees, turnover generated from the sale of products either embodying the
patented invention or the making of which used a patented process.
In this Review Andrew Clay explains the main changes which the government is proposing to make following the consultation process.