The following consultations were also launched last month:

• Introduction of a preferential regime for profits arising from patent
• Specific policy proposals for Research and Development tax credits
• The policy detail, and implementation of a lower rate of Inheritance Tax (IHT) where people leave a charitable legacy of 10% or more of their estate when they die
• A proposal to introduce a statutory definition of tax residence for individuals
• Reform of the taxation of non-domiciled individuals
• Simplification of regulatory penalties

Patent Box Consultation

The Government has previously committed to introducing a preferential regime for profits arising from patents, known as a Patent Box. This will allow companies to apply a 10% corporation tax rate to profits attributed to patents.

It is intended that the Patent Box will encourage companies to locate the high-value jobs and activity associated with the development, manufacture and exploitation of patents in the UK.

The Government published a wider Corporate Tax reform consultation which included a review of the taxation of intellectual property.

This consultation builds on that initial review and provides a detailed explanation of how the Government proposes to implement the Patent Box, and seeks views on the proposed design of the regime.

The consultation runs until 2 September 2011 and the consultation document can be accessed at http://www.hm-treasury.gov.uk/d/consult_patent_box.pdf

Research and Development Tax Credits Consultation

Budget 2011 contained a number of announcements on reforms to the R&D tax credits schemes. This consultation is part of the corporate tax reform process and seeks views on proposals to simplify the schemes and make them more effective.

These include the relief for Qualifying Indirect Activities; how to give relief for subcontracted ‘routine’ activities; the removal of the PAYE/NICs cap and potential changes to the ‘going concern’ definition.

The Government would also welcome comments on the proposal put forward by a number of companies to move from the current ‘super deduction’ system to one which delivered a credit against tax.

The consultation runs until 2 September 2011 and the consultation document can be accessed at:-http://www.hm-treasury.gov.uk/consult_r_d_tax_credits.htm

Charitable Legacies Consultation

Budget 2011 announced that the Government will introduce a lower rate of IHT of 36% where people leave a charitable legacy of 10% or more of their estate. The 10% charitable legacy will be based on the value of the estate after deducting IHT reliefs and exemptions. This change is expected to apply for deaths on or after 6 April 2012.

The proposed change will affect people considering leaving a charitable legacy when they die, or who are making or amending a will that provides for a charitable legacy. It may also affect beneficiaries and personal representatives of an estate of a person who has died.

The consultation runs until 31 August 2011 and the consultation document can be accessed at http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ConsultationDocuments&propertyType=document&columns=1&id=HMCE_PROD1_031346

Statutory Resident Test

This consultation proposes new statutory rules to define tax residence and seeks views on their design and implementation. The Government advises that it is intended the tax residence of the vast majority of individuals will not be affected by the introduction of a new statutory definition. As part of this consultation, the Government is also seeking views on options to reform the concept of ordinary residence, which currently lacks a statutory definition. The residence of companies will not be affected by the proposed changes.

HMRC is also considering the possibility of providing an interactive online tool to enable individuals to self-assess their residence status when the new statutory definition is introduced. A prototype of this tool is available and interested parties are invited to make use of the tool to assess how a statutory test could operate in practice.

For more information visit:-http://www.hm-treasury.gov.uk/consult_statutory_residence_test.htm

Reform of the Taxation of Non-domiciled Individuals

This consultation seeks views on the detailed policy design of the proposed changes announced at Budget 2011 to the taxation of non-domiciled individuals.

Go to:- http://www.hm-treasury.gov.uk/consult_nondom_tax_reform.htm to access the con-doc in full.

Simplification of Regulatory Penalties

This consultation is the first of two in the final stage of the Review of Powers' reforms of penalties in the tax system. This consultation covers all penalties not previously considered and seeks views on the design principles of a new penalty framework.

For more information visit:- http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&propertyType=document&id=HMCE_PROD1_031367