Offshore receipts in respect of intangible property
Offshore receipts in respect of intangible property

The following Tax guidance note provides comprehensive and up to date legal information covering:

  • Offshore receipts in respect of intangible property
  • Legislation and guidance
  • Commencement of the rules and background
  • Target of the rules
  • Income tax charge for offshore receipts in respect of IP
  • Application where UK sale is made through unconnected persons
  • Exemptions
  • Exemption if foreign tax at least half of UK tax
  • Exemption if business undertaken in the non-UK territory of residence
  • Exemption for limited or de minimis UK sales
  • more

STOP PRESS: Following consultation, amendments have been made to the UK rules taxing offshore receipts in respect of intangible property (ORIP) by The Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019, SI 2019/1452. The regulations (which, subject to limited exceptions, take effect retrospectively for the 2019–20 tax year and subsequent tax years) aim (among other changes) to:

  1. clarify that online advertising constitutes a UK sale to the extent the advertising is targeted at persons in the UK (new subsection (6) inserted into section 608F of Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005))

  2. introduce a look-through rule for something being provided for resale (new subsections (4)–(5) inserted into section 608F of ITTOIA 2005)

  3. remove from the scope of the ORIP rules, UK sales made by unrelated third parties where the IP is so diluted it generates little value to the end sale (new section 608GA of ITTOIA 2005)

  4. add four new exemptions from the ORIP rules:

    1. for companies resident in specified jurisdictions (to be specified by HMRC via secondary legislation to include those jurisdictions that do not pose a risk to the purpose of the legislation but that are within the scope of the ORIP rules because they don’t have an appropriate double tax treaty with the UK) (new