Corporation Tax Act 2010 section 357BP

Meaning of "new qualifying IP right" and "old qualifying IP right"

Section 357BP defines what counts as a "new qualifying IP right" and an "old qualifying IP right" for the purposes of the Patent Box regime, using date-based tests and anti-avoidance provisions.

• A new qualifying IP right is one granted on application filed on or after 1 July 2016, or assigned to the company, or exclusively licensed to the company, on or after that date; any qualifying IP right that does not meet these criteria is an old qualifying IP right.
• An earlier relevant date of 2 January 2016 applies to assignments and exclusive licences where the transaction was between connected persons, one of the main purposes was avoidance of a foreign tax, and the transferor was outside the charge to both UK corporation tax and any Treasury-designated foreign patent box-type tax.
• The Treasury may designate foreign taxes for the purposes of the anti-avoidance rule, but only where the foreign regime corresponds to the UK Patent Box, and no such designation could be made after 31 December 2016.
• The classification of IP rights under this section is also subject to special rules for cost-sharing arrangements where the qualifying IP right or exclusive licence is held by another party to the arrangement.