Guernsey Image Rights Structures: Managing IP for Athletes and Brands

The World's First Statutory Image Rights Regime

In 2012, Guernsey enacted the Image Rights (Bailiwick of Guernsey) Ordinance 2012, creating the first jurisdiction in the world to establish a statutory register of image rights. This legislation transformed what had previously been an uncertain patchwork of passing-off claims, privacy torts, and contractual arrangements into a defined, registrable intellectual property right.

The Ordinance allows any individual (a "personality") or entity (a "registered personality") to register their image — encompassing name, voice, signature, likeness, appearance, silhouette, and other distinctive characteristics — as a legally protected right. Once registered, the image right can be licensed, assigned, and enforced just like any other IP right (trademarks, patents, copyrights).

How the Regime Works

Registration

An application to register an image right is made to the Guernsey Registry and must include:

• Identification of the personality: The individual or entity whose image is to be registered
• Description of the image: The specific attributes to be protected (name, likeness, voice, etc.)
• Evidence of distinctiveness: Demonstrating that the personality's image has commercial value and is recognisable to the relevant public

The registration process typically takes 4-8 weeks and costs approximately £1,000 in government fees. Once registered, the image right is valid for 3 years and renewable indefinitely.

Ownership and Licensing

A registered image right can be:

• Owned by the personality directly — but this is typically not the preferred structure for tax efficiency
• Assigned to a Guernsey company — the personality assigns their image rights to a Guernsey-incorporated company (the "Image Rights Company" or IRC), which then licenses the rights back to the personality or to third parties (sponsors, advertisers, media companies)
• Held in trust — the image right can be settled into a Guernsey trust for succession planning and asset protection purposes

The Typical Structure

The standard Guernsey image rights structure involves:

1. The personality (athlete, entertainer, or brand) assigns their registered image right to a Guernsey Image Rights Company (IRC)
2. The IRC is incorporated under the Companies (Guernsey) Law 2008 and is tax-resident in Guernsey (0% corporate tax rate)
3. The IRC grants a licence to the personality's employer (e.g., the football club, the entertainment company, or the brand's commercial arm) to use the personality's image in sponsorship, merchandising, advertising, and media
4. The employer pays licence fees to the IRC in exchange for the right to use the personality's image
5. The IRC accumulates licence fee income at 0% Guernsey tax
6. The IRC can reinvest income, make distributions to shareholders, or fund the personality's other investments

Enforcement

Under the Ordinance, the holder of a registered image right has the legal right to:

• Prevent unauthorised commercial use of the registered image
• Seek damages for infringement (including an account of profits)
• Apply for injunctive relief to stop ongoing or threatened infringement
• Register the right in other jurisdictions using the Guernsey registration as evidence of ownership (similar to registering a trademark internationally)

Tax Treatment

In Guernsey

The IRC is subject to Guernsey's standard corporate tax rate of 0%. There is:

• No capital gains tax on the disposal of image rights
• No withholding tax on licence fee income received from overseas
• No withholding tax on dividends paid by the IRC to its shareholders
• No stamp duty on the assignment or licensing of image rights
• No GST (Guernsey has no consumption tax)

In the Personality's Home Jurisdiction

The tax efficiency of the structure depends critically on the tax treatment of image rights payments in the personality's home jurisdiction:

United Kingdom: HMRC has historically accepted that a portion of an athlete's or entertainer's total remuneration package can be allocated to image rights (typically 15-20% of total compensation), provided the allocation is commercially justifiable and the IRC has genuine substance. However, HMRC has challenged several high-profile structures, and the Agassi v Robinson (2006) case established that image rights payments can constitute UK-source income where the image is exploited in the UK.

Key HMRC requirements:

• The image rights must have genuine commercial value independent of the personality's services
• The IRC must have substance — board meetings in Guernsey, a Guernsey-resident director, documented licensing negotiations
• The allocation between service income and image rights income must be arm's length and documented in a formal valuation
• Transfer pricing rules (TIOPA 2010, Part 4) apply to cross-border payments between connected parties

Other jurisdictions: The treatment varies widely. In the US, image rights payments are generally treated as royalties subject to the applicable US-Guernsey treaty provisions. In most EU jurisdictions, the ATAD anti-avoidance rules and domestic transfer pricing provisions will apply.

Who Uses Guernsey Image Rights Structures?

Professional Athletes

Premier League footballers, Formula 1 drivers, professional golfers, and tennis players have all used Guernsey IRCs. The structure is particularly valuable where:

• The athlete has significant endorsement income
• The club or team is willing to split remuneration between employment income and image rights licence fees
• The athlete's image has demonstrable independent commercial value

Entertainers and Performers

Actors, musicians, television presenters, and social media influencers use IRCs to manage the commercial exploitation of their image across multiple platforms and territories.

Brands and Corporate Personalities

The Ordinance is not limited to natural persons. Corporate brands, mascots, and fictional characters can also be registered, making the regime useful for franchise operations and brand licensing businesses.

Practical Considerations

Substance Requirements

An IRC must demonstrate genuine Guernsey substance:

• Board meetings: At least quarterly, held in Guernsey with Guernsey-resident directors participating
• Decision-making: Licensing negotiations and commercial decisions should be documented as originating from the Guernsey board
• Registered office and administration: The IRC should maintain its books and records in Guernsey
• Bank account: A Guernsey bank account is strongly recommended

Costs

• Image rights registration: ~£1,000 (government fee) + legal costs of £2,000-£5,000
• IRC incorporation: £100 (government fee) + legal costs of £1,500-£3,000
• Annual administration: £5,000-£15,000 (depending on complexity)
• Annual audit: £3,000-£8,000
• Image rights valuation: £5,000-£15,000 (initial valuation by an independent specialist)

Key Takeaways

• The Image Rights (Bailiwick of Guernsey) Ordinance 2012 is the world's first statutory image rights register
• Registered image rights are a distinct, enforceable form of intellectual property that can be licensed and assigned
• The standard structure involves assigning image rights to a Guernsey company that licenses them at 0% Guernsey corporate tax
• HMRC typically accepts image rights allocations of 15-20% of total compensation where supported by a genuine valuation and substance
• Substance requirements are critical — board meetings, documented decision-making, and Guernsey administration are essential
• The regime serves professional athletes, entertainers, influencers, and corporate brands