Image Rights

Guernsey is establishing itself as a market leader in the realm of image rights.

One of the most interesting developments to arise from Guernsey’s continuing development of IP is a plan to define and create a legal register of image rights in Guernsey This will allow owners of such rights to register them and thereby create a more clearly separable and marketable asset. In the same way that a trademark demonstrates distinctiveness for a company or product, so an image right will demonstrate the distinctiveness of an individual. By structuring image rights royalties for sporting personalities, for example through a Guernsey image rights holding company, an individual (or their employer) could enjoy substantial savings on income and capital taxes. They would not be subject to local taxes either provided the beneficial owner of those rights is not resident in Guernsey.

Royalties or other income can be received into a Guernsey company and will not be subject to local taxes to long as the owner is not tax resident in Guernsey.

Guernsey has no capital taxes or death taxes and no VAT, GST or indirect taxes are levied.

There are also many non-tax reasons for separating tax-neutral image rights into a separate legal entity, not least of which are future estate planning and asset protection. Image rights can survive and be valuable long after the death of the individual (Elvis Presley or Michael Jackson, for example).

Image rights may also be a valuable asset to protect from the risks of personal bankruptcy in the same way as more traditional assets.
Through the Collas Day Group, we have extensive experience of managing and structuring image rights contracts now, prior to the development of the register itself. It is important to identify such rights and structure them early and appropriately.

The earlier an image right can be assigned or sold into the management vehicle the better as there is often a capital gain to be taxed at the point of assignment. Early assignment allows the asset to be transferred at a lower value, reducing this liability.

Image Rights will be a Guernsey only right, expected to come into force in early 2010. Intended to be used in conjunction with the appropriate trade mark rights, we would be delighted to help you maximise the possibilities around this new and exciting development.