British government clowning around with patents -- but no-one's laughing

The IPKat is astounded to read, on the BBC's coverage of the British pre-budget report, a bullet-point which reads as follows:

"New 10% tax on income from patents to boost science development".

The Telegraph is more specific: Corporation Tax at the rate of 10% is to be introduced on income from patents. This, explains easyBourse, is "a bid to underpin the life sciences and technology industries" according to Chancellor Alastair Darling who reassuringly adds: "I want to encourage research into pharmaceuticals and the biotechnology industry".

On the assumption that this is not a practical joke, it now seems that the British government is set to tax the fruits of research and development in order to fund ... research and development. What a wonderful incentive to invest, particularly when other countries are encouraging R&D by doing the exact opposite. Merpel says, don't worry: Britain's best tax brains will soon find ways of showing that the income in question isn't derived from patents at all, and the government's coffers will be none the fuller.

Taxation of income from patents in Belgium here
Tax-friendly regime for intellectual assets in Ireland here

NOTE: this post should be read in conjunction with that which follows it here.