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How much is a football transfer taxed?
- Thread starter Doc Lynam
- Start date
One for our resident expert? [MENTION=31]El Presidente[/MENTION]
Are there any specific taxes, or is it just CT?
Are there any specific taxes, or is it just CT?
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,292
we dont tax money transfers, taxes are on profit or capital gains.
as a player registration (which is really what you are transferring, as players arent "owned" obvs) isnt a tangible asset (?) i dont believe it would have any CGT, so unless the football clubs turn a profit, no taxes will be incurred.
as a player registration (which is really what you are transferring, as players arent "owned" obvs) isnt a tangible asset (?) i dont believe it would have any CGT, so unless the football clubs turn a profit, no taxes will be incurred.
Publius Ovidius
Well-known member
It's the profit you make on the deal isn't it? Cost 20 mill sold 30 mill....profit 10 mill........but club registered in cayman islands or somewhere like that and doesn't pay anything
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,292
you dont get taxed on your house sale, exempt from CGT. a second property will be liable to CGT if there is a capital gain. im not 100% positive about transfers just it seems likely its not counted for CGT. it would come up against Corporation tax if the club made a profit overall.
Gazwag
5 millionth post poster
If your business is buying and selling houses you get taxed on your profit, buying and selling players is part of the business of a football club.
Selling your house is taxable but the gain is subject to private residence relief, if you live there.
Shropshire Seagull
Well-known member
I'm no expert .....
All limited companies must pay corporation tax on profits.
So if you buy a player for £1m and sell for £2m there is a £1m gain
However, if treated as an asset these are accounted for quite differently.
Normally an asset is depreciated over a period of time - example: IT kit is assumed to have e.g. a 4 year "life" so a quarter of it's value is taken in the accounts as a "cost" aka depreciation charge.
With football players, their "asset life" and value are way more volatile so I have no idea how they are accounted for.
All limited companies must pay corporation tax on profits.
So if you buy a player for £1m and sell for £2m there is a £1m gain
However, if treated as an asset these are accounted for quite differently.
Normally an asset is depreciated over a period of time - example: IT kit is assumed to have e.g. a 4 year "life" so a quarter of it's value is taken in the accounts as a "cost" aka depreciation charge.
With football players, their "asset life" and value are way more volatile so I have no idea how they are accounted for.
I think it's the value of the transfer plus the player's contract amortised over the length of the contract but not entirely sure.
GOM
living vicariously
VAT when we buy or sell something ?
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,292
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,292
in a transfer they are paying for the players registration to play (as i understand it). the player is then paid his weekly salary for his services.
Doc Lynam is right.
You pay stamp duty on your house. That's tax, and it's a load of BS. Just because you need to move from one area to another, you have to pay tax. And if you happen to live in the south, moving from one place to another of equal value will cost you a lot in tax.
You pay stamp duty on your house. That's tax, and it's a load of BS. Just because you need to move from one area to another, you have to pay tax. And if you happen to live in the south, moving from one place to another of equal value will cost you a lot in tax.
Tight shorts
Active member
The rate of tax would be 20% corporation tax. This blog about Forest explains about the accounting treatment https://mistrollingin.wordpress.com/2014/08/07/accounting-treatment-for-transfers-and-ffp/
. Anyrate the selling price is much less than the paying price because of agent's fees etc. At least 20% differrence on the occasions when this figure is known.