Offshore receipts in respect of intangible property (ORIP)

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

  • Offshore receipts in respect of intangible property (ORIP)
  • Legislation and guidance
  • Commencement of the rules and background
  • Target of the rules
  • Application of rules to individuals and trusts
  • Income tax charge for offshore receipts in respect of IP
  • Income tax charged on the gross amount (and whether revenue or capital)
  • Receipts from offshore IP apportioned to UK sales
  • UK sales can be made directly, indirectly and even through unrelated third parties
  • Application where UK sale is made through unconnected persons
  • More...

Offshore receipts in respect of intangible property (ORIP)

Since 6 April 2019, a person that is neither UK tax resident nor resident in a full treaty territory (ie not resident in a territory with which the UK has a double tax treaty (DTT) that contains a non-discrimination provision) is subject to UK income tax on gross receipts (whether revenue or capital in nature) from intangible property (IP) held in low-tax jurisdictions to the extent that the receipts are referable to UK sales made directly by the non-UK tax resident person or indirectly through related or unrelated parties. These rules are known as the offshore receipts in respect of intellectual property (ORIP) rules. A targeted anti-avoidance rule (TAAR) has retrospective effect, applying to arrangements made on or after 29 October 2018.

The income tax is collected from the non-UK resident person under self-assessment, but in certain cases of non-payment, HMRC can also recover the tax from members of the same control group as the non-UK resident.

This Practice Note sets out:

  1. where the legislation and guidance can be found

  2. the commencement of, and background to these rules

  3. the aim of these rules

  4. an outline of how these rules impose an income tax charge on non-UK residents and, in particular, how the rules apply where the UK sale is made through one or more unconnected persons

  5. a summary of

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