The Government will consult during 2010 on the introduction of a ‘patent box’ regime for UK companies with effect from April 2013. The intention is that there will be a reduced corporation tax rate of 10% for income from patents registered from that date. There are still no detailed proposals available and final legislation is unlikely to emerge until 2011.

Whilst the new regime will be good news and make the UK a more attractive place to hold IP, there is obviously some disappointment concerning the delay of more than 2 years before its introduction. It is also worth noting that the UK patent box will still have to compete with similar provisions in non-UK jurisdictions where the tax rate is closer to 5% and the scope is wider to include other intellectual property rights in addition to patent rights.