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Offshore receipts in respect of intangible property draft regulations consultation – Law Society response

22 July 2019

The proposals

The government introduced the ORIP legislation in the Finance Act 2019, which came into effect on 6 April 2019.

It imposes an income tax charge on gross income that certain non-residents receive from exploiting intangible property to enable, promote, or facilitate UK sales.

This is a consultation on the (draft) Income Tax (Trading and Other Income) Act 2005 (Amendments to Chapter 2A of Part 5) Regulations 2019 (the Draft Regs) that amend the ORIP legislation.

Our view

There are several issues that should be addressed in the draft regulations to make the ORIP regime clearer and easier to apply in practice.

These include the:

  • definition of “intangible property”
  • scope of the exemptions
  • impact of the secondary liability provisions on corporate M&A and restructuring activities, all of which should be re-visited

What this means for solicitors

Solicitors who advise on international tax and corporate matters would be affected by these proposals.

Next steps

The consultation closed on 19 July.

The consultation will inform the final form of the draft regulations, which we expect to be made soon.

View the consultation on the GOV.UK website

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