Recently, in the UK, this has most famously arisen when
Rhianna successfully sued Top Shop for using her image on
tee-shirts without consent.
However, in English law, there is no definition of an image
right and this can make it difficult and costly to take legal
action in situations, like Rhianna’s, where the right is
In this context one recent legal innovation has been the
establishment, in the Channel Island of Guernsey, of
the World’s first register of Image Rights. This enables
personalities to register their “image” (which extends to
the use of their name, voice, likeness etc) in the same
way as businesses can register, for example, a trademark.
Although Guernsey is a British Crown Dependency and
has many familar aspects, such as the use of the British
pound as its currency, it is not part of the United Kingdom
and has its own system of laws, and therefore has the
authority to create this register.
In truth, the existence of image rights as a valuable right
has long been recognised, especially in the professional
football industry, where it is considered that only part
of the income generation of players can be attributed to
their on-field activities.
Clubs and other commercial enterprises frequently make
money by utilising the “brand” of a player. This can be
simply through a player endorsing, or acting as brand
ambassador, for a product or service, or it can be where
the player is more intrinsic to the product. Examples in
this latter category would be club merchandise or avatars
of a player featuring in video games.
Where clubs, or other organisations, are making money
this way there is a recognition that they are obliged
to obtain the player’s consent, for which the player is
generally paid a fee.
In many countries, such fees may be taxed more
beneficially than employment income, and in others (such
as the UK) it can be possible to take advantage of the
relative flexibility of image rights, by transferring them to
a company, to achieve a lower overall rate of taxation.
This has been particularly true in the UK where many
foreign footballers have come to play in both the
Premiership and other leagues. Many of these players have
image rights that are more valuable in their home country
than the UK and which can be exploited regardless of the
level at which the player’s English (or Scottish) club is
These non-UK players have often been able to take
advantage of their status as resident “non-doms” and pay
little or no UK tax on payments made to non-UK image
rights companies provided that the money remains outside
Perhaps unsurprisingly, many tax authorities - including
HMRC in the UK – have sought to challenge the validity of
image rights payments, arguing that they really form part
of a player’s employment income.
The tax authorities have generally been unsuccessful,
and the Courts in the UK, USA and many other countries
have supported the view that payments for image rights
– whether from a football club or third party – can form a
legitimate part of a sportsman’s total earnings in addition
to employment income.
However, the tax authorities have had more success in
arguing that footballers and other sportsmen have been
claiming that too much of their earnings came from
image rights. The result of this is that some of those
players (or sometimes their clubs) have faced substantial
additional tax bills, where a valuation of rights has been
Despite being established in a traditionally low tax
jurisdiction, the Guernsey image rights register does not
fundamentally change the tax landscape. The risks and
opportunities that were available to players, their clubs
and their sponsors remain unaffected by the introduction
of the register.
However, the Law introducing the register does provide
a comprehensive definition of image rights. Whilst this
definition is not strictly binding outside Guernsey, it is
likely to prove helpful to lawyers and agents acting for
players and other personalities. It may help them define
There is a growing recognition of the importance of the rights
attaching to personality, and the characteristics of a personality
– commonly known as image rights.
THE TAXATION OF GUERNSEY
which rights can (and cannot) be exploited in commercial
contracts and may also help to defend players whose
rights have been infringed without permission.
The opportunity to actively register a right (albeit outside
the UK) may also help players who are trying to assert
their rights, and may also help prove ownership of those
The greater legal certainty that the new law offers
provides greater comfort for players looking to exploit
their rights and potentially makes those rights easier to
value. As explained above, valuing those rights is key to
maximising the revenue that can be obtained from them,
in both commercial negotiations and in the face of any
future enquiry from a tax authority.
As part of the world’s fifth largest accounting network,
BDO can help advise players, their agents, clubs and
sponsors who are planning on entering into image rights
contracts, both on the value of their associated rights and
on the tax consequences of the proposed arrangements.
We pride ourselves on our ability to provide exceptional
client service and our award-winning UK private client
team can advise on a multitude of areas, working to your
objectives and within your risk comfort zone to reach the
best solution for you. Our bespoke high quality tax advice
and support is clearly explained and will help to protect
wealth and limit the risk of non-compliance.
We work with a variety of high net worth individuals,
including many high profile sportsmen and entertainers,
many of whom may be tax resident in a range of
jurisdictions. We also help advisers to our private clients,
working with agents, trust companies, private banks and
lawyers and have a deep understanding of the issues faced
across the full range of taxes.
Our team of senior tax specialists guarantee a discreet,
personal service that will help you solve tax issues fast,
delivering accurate, authoritative advice and guidance on
all tax-related matters. As the UK Member Firm of BDO
International, with over 1,200 offices operating in 139
countries (including Guernsey) we are particularly well
placed to assist with cross-border issues.
+44 (0) 20 7893 3470
55 Baker Street
+44 (0) 1481 748450
PO Box 180, Place du Pré
Rue du Pré, St Peter Port
If you would like to discuss any of the issues
raised in this article please do not hesitate
to talk to your usual BDO contact or
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The taxation of Guernsey image rights
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