Corporation Tax Act 2010 section 357D

Alternative method of calculating relevant IP profits: "streaming"

Section 357D provides an alternative method, known as "streaming", for calculating the relevant IP profits of a trade under the Patent Box regime, and sets out when a company may elect to use it or is required to do so.

• A company may elect to use the streaming method instead of the standard method for calculating relevant IP profits, provided the accounting period began before 1 July 2021, the company is not a new entrant, and none of the relevant IP income relates to a new qualifying IP right.
• A streaming election, once made, applies for the accounting period in which it is made and all subsequent accounting periods, unless the company ceases to use streaming following a change of circumstances.
• The election can be applied selectively to any or all of a company's trades, allowing the company to choose which trades would benefit from streaming.
• Where any of the mandatory streaming conditions are met for a trade in an accounting period, the company must use the streaming method — it is not optional in those circumstances.