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  • Patent Box qualification

    16 June 2020

    Andy Wood

    Introduction

    Patent Box is an attractive relief for qualifying companies with qualifying IP.

    There are primarily two areas to consider:

    • Does the IP qualify?
    • Does the Company qualify?

    We consider both areas below.

    What IP qualifies?

    The relevant income needs to arise in respect of a patent granted by:

    Other than that, patents issued in other countries – for example in US – do not qualify for Patent Box relief.

    Qualifying Companies

    General

    The Company must also meet two main conditions:

    • Ownership Condition; and
    • Development condition

    Ownership condition

    The IP must be under:

    • Current ownership – In other words, the Company owns the qualifying IP or has an exclusive licence to it in an area; or
    • In some cases, where it was previously owned – and was in the patent box when the Company previously owned it / had the exclusive licence.

    There is a further condition – the ‘active ownership condition’ that must be satisfied for claims by a group company

    Development condition

    The second condition is that the Company must satisfy the development condition.

    Here, it must have either:

    • Created or significantly contributed to the creation of the IP; or
    • Performed a significant amount of activity for the purpose of developing the IP

    If you have any queries about this article, the Patent Box, or tax matters generally then please do get in touch.