The Government is withdrawing income tax relief for payments of patent royalties by individuals to combat perceived abuse of these rules. The relief will be withdrawn for such patent royalty payments made from today onwards.
This is in stark contrast to the introduction, from April 2013, of a new “Patent Box” regime for companies. The Patent Box regime will enable companies to apply an effective 10% rate of corporation tax on qualifying worldwide profits earned after 1 April 2013 which are attributable to qualifying patents and similar intellectual property rights.
For more information about the Patent Box regime, please see our summary here.