Our services are centred around intellectual property that can be registered. We protect innovation, design, and branding across all sectors of industry, and at all stages in the supply chain.

For each IP right we offer services covering strategic advice, pre-registration searches, registrations and renewals, oppositions and dispute resolution. We handle work throughout the world, working with local colleagues in over 100 countries.


Our attorneys specialise in one or more sectors of industry, which enables them to provide quality advice with a commercial focus.

Our patent specialists have detailed understanding of the background technology, which ensures that your patent applications are prepared with the correct scope, reducing the likelihood of challenges from third parties and objections from the patent office.

They also advise whether other forms of protection would be more appropriate. Our brand specialists work with brand managers for leading brands and their advice is commercially focussed making sure that you get the best value from your budget.

Patent Box: what are the proposed changes?

12th Nov 2015

The current UK Patent Box will close its lid to new entries at of the end of June 2016. On 22 October 2015, the UK Government published a consultation document proposing changes to the design of the Patent Box. The proposed changes are to ensure that it complies with the new international framework for preferential tax regimes for intellectual property, and the consultation seeks views on how this would affect businesses.

The consultation here, seeks those views by 4 December, and the UK Government expects to release draft legislation later in December. A response to the consultation will be published in Spring 2016 along with any amendments to the draft legislation that may be needed.

The international framework put in place by the OECD (Organisation for Economic Co-operation and Development) seeks to reduce the effect of Base Erosion and Profit Shifting (BEPS). BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity.

The UK Government’s preferred approach to achieving compliance with the framework is set out in the consultation document. That approach uses R&D expenditure as a proxy for substantial economic activity and links the benefit of the Patent Box regime to the requirement to have undertaken the R&D expenditure incurred to develop the IP. The proposal is to limit the tax benefits to a proportion of income based on a “nexus ratio” calculated by reference to qualifying R&D expenditure as a proportion of total R&D and IP acquisition costs. Helpfully, the consultation document sets out how the nexus ratio is calculated, and provides an example. A flowchart setting out the process for determining the relevant IP profit / loss can be found here.

The modified Patent Box may result in increases in the complexity of determining the relevant IP profit/loss. Therefore, if your IP is not in the current Patent Box, but you would like it to be, do not delay too much longer, as the deadline of 30 June 2016 is fast approaching.

If you are interested in learning more about the Patent Box or the changes proposed by the consultation, please contact us.

 This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

Paul Loustalan
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Would you like to know more? You can talk to Paul Loustalan who will be able to help. Call +44 (0)20 7242 0901


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