INTM620730 | Offshore Receipts in respect of Intangible Property (ORIP): Glossary of terms: Meaning of full treaty territory

ITTOIA05/Ch2A/S608E

A “full treaty territory” is a territory with which the UK has a full double taxation agreement that contains a relevant non-discrimination article. A relevant non-discrimination article provides that the nationals of each contracting state are not subject to unfavourable tax treatment in comparison with nationals of the other contracting state.

A “national” in relation to a contracting state includes an individual possessing nationality, or citizenship, of the contracting state as well as a legal person, partnership or association deriving its residence status from the laws of the contracting state.

Examples of some territories with which the UK has a double taxation agreement but which do not contain a relevant non-discrimination article include the UK’s double taxation agreements with the Crown Dependencies, some British Overseas Territories, and some other territories such as Hong Kong and Saudi Arabia.

A list of territories with which the UK had a full tax treaty as of October 2019 can be found below. This list may change if the UK enters into new double taxation agreements or amends existing double taxation agreements.

Example 1

The double taxation agreement between the UK and Switzerland contains a relevant non-discrimination provision. For the purposes of this chapter, Switzerland will be classed as a full treaty territory and the charge will not apply to persons resident there.

Example 2

The double taxation agreement between the UK and the Isle of Man does not contain a relevant non-discrimination provision. For the purposes Chapter 2A, residents may come within the charge however treaty relief may be available subject to a valid claim.

Example 3

The double taxation agreement between the UK and Gibraltar has effect from 6 April 2020 in respect of income tax. It does not contain a relevant non-discrimination provision. For the purposes of Chapter 2A, residents are within scope on amounts arising to 5 April 2020. Treaty relief may be available from 6 April 2020 subject to a valid claim.