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IP Box, schematically

The arithmetic is straightforward: an 80% notional deduction, 20% remains taxable at the 15% standard rate, i.e. 3% on fully qualifying IP profits. Whether your asset qualifies is a case review. This calculator does not replace it.

The formula in one sentence

Effective IP Box tax on fully qualifying IP profits = qualifying profit × 20% × 15% = qualifying profit × 3%. Other profits stay at the 15% standard rate. The older 2.5% figure belonged to the 12.5% standard rate.

IP_Box_tax = IP_profit × (1 − 0.80) × 0.15 + other_profit × 0.15

Schematic comparison, not a quote
ItemWithout IP BoxWith full IP Box qualification
Standard rate15%15% on 20% of IP profits
Effective burden on IP profits15%3%
Other profits15%15%
Corporate tax without IP Box
15,000
Corporate tax with full IP Box on the IP line
3,000
Effective overall burden on both lines
3 %

The figures are schematic arithmetic, not a tax quote.

This is not a quote and not an eligibility review. The IP Box still needs nexus, asset quality, substance and documentation.

IP Box & tax structuring service · IP Box definition

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