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For clear, concise, cost-effective advice on intellectual property, patents and industrial designs
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Although you must have a British patent, the profit against which tax relief can be claimed includes worldwide income from products incorporating an invention covered by a granted, in force, UK or EPO (UK) patent.
  • sales of patented items, anywhere;
  • income from licensing patents;
  • where the patented component is incorporated into another product, the sales of that product, in this case:
  • where the parts, components or separate items are aggregated for sale, the items must together constitute a single composite product in which they are functionally interdependent;
  • income from the sale of patents or from infringement;
  • spare parts for a patented product.
The sale of products made using a patented process is treated as a notional licence, so long as the product is not directly covered, (so the relief cannot be claimed twice, once for using the process and once for making products via the process).

Patents are granted from the date of filing, although the act of grant may not take place until some years after the filing date. Consequently, the relief can be claimed retroactively. For example, a patent application filed on 1 April 2012 might not grant until 1 April 2014. However, products covered by the patent were sold and taxable profits accrued from before 1 April 2013. Profits from 1 April 2013 can be put into the Patent Box and will be subject to 14% or 15.2% corporation tax.
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