Guernsey Adopts World-First Image Rights Law

Riga, Latvia, December 4, 2012, 09:00 / Industry News / Jurisdictions: Guernsey, Source: Tax-News.com

The world's first image rights legislation, The Image Rights (Bailiwick of Guernsey) Ordinance, 2012, is to enter into force on December 3, 2012, following approval by Guernsey's legislative assembly.

The legislation positions Guernsey as the first jurisdiction to have a legislative framework to register an image, enabling effective management and control of the commercial use of a person's identity, images associated with that person, including distinctive characteristics, such as signature, voice, mannerisms and gestures.

The legislation not only establishes image rights as a new and separate branch of intellectual property law, it will also provide clearly defined safeguards for celebrities and sports personalities looking to further protect and capitalize on their image.

This law will create an image rights register enabling legal recognition of a "registered personality" (i.e. the exclusive rights to the images associated with or registered against the personality). Once registered, the image right, as an identifiable asset, can be placed within a Guernsey structure, adding flexibility to allow image rights income to be channeled into a wealth management structure such as a trust, or for instance, a partnership structure to overcome complex asset ownership arrangements.

Welcoming the States of Guernsey's endorsement of the law, Fiona Le Poidevin, Chief Executive of Guernsey Finance, the promotional agency for the island’s finance industry, said:

“We believe that the new legislation will be attractive to global brands and in particular sports and entertainment stars where their image is a particularly important asset both to be protected and exploited for commercial gain. The hope is that they will use Guernsey for its unique image rights capability as well as the island’s broader wealth management offering to service other needs."

“This legislation will be particularly useful in helping to prevent high profile individuals from becoming the centre of disputes when they die. Succession planning provisions within the Guernsey law mean that registered rights can be treated as part of the deceased’s estate and it can then be specified how these rights are dealt with and who should benefit from them.”

By establishing a special purpose structure to house one's image, significant tax advantages can be unlocked. The new legislation will enhance the argument that income derived from image rights should be taxable in the jurisdiction in which they are registered. The development of Guernsey's legislation comes after years of uncertainty surrounding the tax treatment of endorsements and sponsorship deals received by sporting personalities, musicians and media personalities.

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