Meridien International is able to assist sports persons, entertainers and their advisors on appropriate trust and corporate structures that offer wealth protection and non-aggressive and sensible tax mitigation.
In todays environment sports persons and entertainers need to be clear as to what they wish to achieve in relation to their wealth management. Speculative investments into unknown areas or exotic financial instruments are high risk and not a long term solution. High risk tax schemes are also only for the brave or stupid. The chance of enquiries and unexpected costs are high if complex and aggressive schemes are implemented and the damage to brand value of the image of sports person should not be under estimated.
The Isle of Man has a large financial services industry which has the following benefits:
- Clear understanding of the UK tax and legal issues
- Close connections with UK advisors
- Local banks, life insurance companies, lawyers, accountants and corporate service providers and trustees
- Transparent links with HMRC
Meridien International is able to assist sports persons, entertainers and their advisors on appropriate trust and corporate structures that offer wealth protection and non-aggressive and sensible tax mitigation. Such firms can also assist the individual to ensure that fully comply with their UK tax obligations. Such structures could include for example excluded property trusts for children and also trust and corporate structures for foreign income of non-domiciled football players who are taxable on a remittance basis. Such structures can also be used as suitable vehicles to hold foreign investments, e.g. foreign holiday homes, or for example trophy assets such as yachts and aircraft.
The new disclosure facility in the Isle of Man also offers a convenient way to discuss in confidence with HMRC any existing structures or schemes they have implemented and if the person is no longer comfortable with the potential exposure to a particular scheme the facility can be used as a cost effective way to unwind the arrangement.
Image Rights Companies
A sportsperson or entertainer’s image or personality rights can form an integral part of their income stream. When considering the term Image Rights or Personality Rights, people will automatically think of high profile footballers or basketball players and in particular how such players have established their own brand based on their Image.
A key feature of utilising image rights structures is the marketability of the individual and their ability to justify the level of income generated through the use of their image by third parties.
An Image Rights company is a limited liability corporate vehicle that is commonly used to hold a sportsman or entertainer’s image rights, which are separate from the playing ability and will fall outside the contract of employment. Once the individual’s image rights are assigned to the image rights company, then all third parties who wish to utilise the individual’s image must contract with the image rights company rather than the individual for the rights to commercially use their image in return for a fee.
Many fiscal authorities accept that sport stars and entertainers have images that can be exploited, but it is essential that when the image rights are transferred to the image rights company, the tax implications of a transfer are considered. This will include such matters as valuing the image rights and ensuring that taxation is paid, in the country of residence, on the value of the transfer. Care will also be needed in the on-going operation of the image rights company to ensure that any future extraction of the funds from the image rights company is tax efficient.
Image Rights structures can also be established for up and coming sport stars and entertainers who envisage the creation of their own brand in the future. This could apply to sports stars prior to the signing of their first professional contract with a Football or Basketball Club, first international appearance, or first sponsorship deal.
Meridien International can assist with the appropriate structuring and assignment of image rights by the individual to an onshore and / or offshore vehicle, and provide administrative assistance to ensure the use of the image is documented effectively.
