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Patent box consultation

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HMRC is consulting until 4 December 2015 on the changes required to the UK’s patent box rules to introduce a ‘substantial activities’ test. This is to comply with the OECD’s internationally agreed ‘nexus’ framework for intellectual property preferential tax regimes, resulting from the base erosion and profit shifting (BEPS) project, which will require a more direct attribution of profit to R&D expenditure. The government intends to publish draft legislation in December 2015, before issuing its consultation response in spring 2016.

Catherine Robins, Pinsent Masons tax partner, said companies would be relieved at some of the consultation proposals, following concerns that the government ‘might close down the current regime earlier than it had to’. She added: ‘Although it’s consulting on the point, the government is proposing to allow relief on the current rules for as long as permitted – that is, until 30 June 2021 for those already within the current regime at 30 June 2016. The new approach will require companies to keep detailed records tracking their expenditure by IP asset, or in some cases product or product family.’ See

Issue: 1283
Categories: News