How neutral is the intergalactic medium surrounding the redshift z=7.085 quasar ULAS J1120+0641?

The quasar ULAS J1120+0641 at redshift z = 7.085 has a highly ionized near zone which is smaller than those around quasars of similar luminosity at z similar or equal to 6. The spectrum also exhibits evidence for a damping wing extending redward of the systemic Lya redshift. We use radiative transfer simulations in a cosmological context to investigate the implications for the ionization state of the inhomogeneous intergalactic medium (IGM) surrounding this quasar. Our simulations show that the transmission profile is consistent with an IGM in the vicinity of the quasar with a volume averaged HI fraction of < f(HI)> (V) greater than or similar to 0.1 and that ULAS J1120+0641 has been bright for 10(6)-10(7) yr. The observed spectrum is also consistent with smaller IGM neutral fractions, < fH(I)>(V) similar to 10(-3) to 10(-4), if a damped Lya system in an otherwise highly ionized IGM lies within 5 proper Mpc of the quasar. This is, however, predicted to occur in only similar to 5 per cent of our simulated sightlines for a bright phase of 10(6)-10(7) yr. Unless ULAS J1120+0641 grows during a previous optically obscured phase, the low age inferred for the quasar adds to the theoretical challenge of forming a 2 x 10(9)M(circle dot) black hole at this high redshift.