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L4. Grant of right to exploit image

GENERAL

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GENERAL

Nature of grant of rights relating to image

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Nature of grant of rights relating to image

- No assignment of 'image rights' under English law, but can grant right to exploit image

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Image right not an asset under English law

- No property in a person's image in English law (Sports Club Plc, §8, Collingwood, §90).

​- HMRC say: "Many jurisdictions outside the UK recognise “image rights”. Most EU countries have some right protecting commercial use of an individual’s name or image, whilst France and Germany in particular have strong image right and personality right laws. Guernsey recently introduced a comprehensive system for registering image rights. Over 30 States in the USA also have some form of image or publicity right. So where non-UK “image rights” are concerned, it is important to establish the nature of the rights and the relevant jurisdiction." (CG68450).​

- See further L3: Sale and transfer of intellectual property.

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Grant of right to allow exploitation of image

- Alternative routes to protecting:

"[33] A celebrity seeking to control the use of his or her image must therefore rely upon some other cause of action such as breach of contract, breach of confidence, infringement of copyright or, as in this case, passing off. However, as Mr Hobbs has properly reminded us, the law of passing off is not designed to protect a person against fair competition. Nor does it protect a person against the sale by others of the same goods or even copied goods. What it protects is goodwill and it prevents one person passing off his goods or services as those of another." (Fenty).

- Accordingly, an individual can grant to a third party (e.g. a company) the right to exploit that individual's image (thereby making lawful what might otherwise be unlawful) (CG68465).

- This is the grant of a new right rather than the assignment of an existing right. 

- In Sports Club Plc "[78] We have already mentioned that we do not consider that the name 'image rights agreements' adequately describes the promotional agreements at issue in this appeal. We wish to adopt the definition of the respondent's counsel that image rights were the ability to make money out of contracting with companies to do things for them and were an opportunity to make money out of the fact that one was very well known. We also adopt his suggestion that what in practice Sports was getting from the promotional agreements was a series of contractual obligations both positive and negative; positive in the sense that the player would, if called upon to do so, do certain things like endorsing products or going to photoshoots and negative in the sense that he could not undertake such activities for others. Again we accept the suggestion of the respondent's counsel that the promotional agreements were for the personal endorsement of products and the like."

- HMRC say: "It is possible for an “image rights” company to own an asset (e.g. a contractual right to exploit a player’s image) but this will often be a right that was newly created in the company, not an asset owned previously by the player (exceptions to this are considered below).  There may be a value to that contractual right if the company disposes of it to a third party, but there is no value at the earlier date when the player grants the right to the company." (CG68465).

- E.g. in Sports Club, the players granted to a company the right to require the players to endorse products.​​​​

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Transfer of business of exploiting image

- May involve some transfer of goodwill (CG68465).

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Legislation: 

Cases: 

Sports Club Plc v. Inspector of Taxes [2000] STC (SCD) 443;

Fenty v. Arcadia Group Brands Limited [2015] EWCA Civ 3

Collingwood v. HMRC [2025] UKFTT 1065 (TC)

HMRC manuals: 

CG68450 - Intellectual Property Rights: image rights: image rights in the UK; 

CG68455 - Intellectual Property Rights: image rights: law of passing-off;

CG68465 - Intellectual Property Rights: image rights: CGT implications: what else if not CGT; 

Commentary: 

See also:

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- No assignment of 'image rights' under English law, but can grant right to exploit image

EMPLOYMENT TAX 

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EMPLOYMENT TAX 

- Image exploitation: genuine payment for right to use image/require promotion not additional remuneration

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- In Sports Club Plc, HMRC argued that an agreement with a company to pay players for the right to exploit their image was a means of paying them additional remuneration for their employment as players. 

- Argument rejected: "[88]...If it is accepted that the promotional agreements were real, and that the parties intended activities to be performed under them in return for payments, and that the parties could have sued on the agreements, then no authority was cited to us to support the view that those realities could be ignored for income tax purposes."​

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Legislation: 

Cases: 

Sports Club Plc v. Inspector of Taxes [2000] STC (SCD) 443;

HMRC manuals: 

Commentary: 

See also:

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- Image exploitation: genuine payment for right to use image/require promotion not additional remuneration

INCOME TAX 

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INCOME TAX 

CAPITAL GAINS TAX 

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CAPITAL GAINS TAX 

- Capital sum derived from an asset

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- Capital sum paid under agreement granting right to exploit image may be capital sum derived from goodwill. 

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Legislation: 

Cases: 

HMRC manuals: 

CG68465 - Intellectual Property Rights: image rights: CGT implications: what else if not CGT; 

Commentary: 

See also:

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- Capital sum derived from an asset

 © 2023 by Michael Firth, Gray's Inn Tax Chambers

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