As the football transfer window heats up, the Premier League will no doubt be leading the way in respect of new UK-bound players. It’s an exciting time for the player, the family, the club and the fans; it’s also important to reflect on how personal finances, including taxes, can impact these career shifts.
As athletes or perhaps agents negotiate contracts, either multimillion pound or less, they must also consider the implications of personal taxation in different jurisdictions. Each country has its own tax regulations, and understanding these can save players significant amounts of money.
Here are seven key considerations for sportspeople and athletes during this exciting time:
1. Tax Residency
Moving countries can change your tax residency status, which affects where and how much tax you pay. It’s crucial to consult with a tax advisor to navigate these changes.
2. Signing bonuses, contract structures and agent’s fees
How contracts are structured can impact taxation. It’s important to consider who’s paying the agent’s fees and thus the tax consequences.
3. International transfers
Players moving from country to country should be aware of double taxation agreements that can help mitigate tax burdens.
4. Long-term planning
It’s not just about the immediate payday. Strategic financial planning can ensure long-term wealth and security.
5. Tax compliance
Ensure you are registered with the relevant tax authorities as tax-geared penalties apply.
6. Supporting the family
It’s not necessarily the player making the move on their own, often their partner, children and or the parents may also follow. How are their lives being funded, are school fees due, do they have there own incomes and thus tax consideration?
7. Corporate structures
Has the correct structure been considered, are there image rights to transfer into this structure?
As we witness exciting transfers and new beginnings for players, don’t forget the importance of making informed financial decisions. Whether on or off the pitch, knowledge is power!
Our music, media, sport and entertainment specialists are experienced in advising ambitious athletes, footballers and other sportspeople on the tax implications of competing and playing in other countries. Our membership of the International Sports Tax Association (ISTA) means that clients benefit from added international expertise.
Get in touch today for a chat about how we can help you.