Corporation Tax Act 2010 section 357BE

The active ownership condition

Section 357BE sets out when a company that is part of a group is regarded as meeting the active ownership condition for the purposes of qualifying for the Patent Box regime.

• A company meets the active ownership condition if all or almost all of its qualifying IP rights satisfy at least one of two conditions during the accounting period
• Condition A requires the company to carry out a significant amount of management activity — meaning formulating plans and making decisions about developing or exploiting the rights
• Condition B requires the company itself (rather than another group member) to carry out development activity in relation to the rights, meeting the development condition under section 357BC
• References to qualifying IP rights held by the company include rights in respect of which the company holds an exclusive licence