Offshore receipts in respect of intangible property

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Offshore receipts in respect of intangible property
  • Offshore receipts on intangibles: amounts assessed
  • Exemptions to charge on offshore receipts from intangibles

From the tax year 2019/20, an income tax charge is applied to certain receipts of non-UK resident persons who are not resident in a full treaty territory, which are in respect of intangible property. The charge is calculated by reference to the extent to which such receipts are referable to the sale of goods or services in the UK. HMRC has issued further draft regulations amending the legislation which will not be finalised until Autumn 2019, however the commentary below includes the proposed changes in these draft regulations as the rules came into force from 6 April 2019. There is also draft guidance which HMRC has issued at the same time which can be found at Offshore Receipts in respect of Intangible Property (ORIP) .

A full treaty territory is one where double tax arrangements have been made in relation to that territory which contains a non-discrimination clause. A non-discrimination provision arises where A and B have a double tax arrangement whereby a national of state A is not subject to any taxation (or any requirement connected with taxation) in state B which is more burdensome than the same taxation or requirements of a national of state B in the same circumstances.

ITTOIA 2005, s 608E

A detailed description of the rules can be found in Simon’s Taxes D4.122A (subscription sensitive) and the rules are discussed further in ‘The new income tax charge on offshore receipts in respect of intangibles’ by Dominic Robertson and Steve Edge in Tax Journal, Issue 1423, 8 (30 November 2018) (subscription sensitive).

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