I have been asked to comment on an investment proposition I have not come across before.
A young sporting talent needs considerable funding to continue his career. If the young person does make it at the very top of their sport the earnings potential is extremely lucrative.
My UK based client has the opportunity to invest in return for a percentage of future gross earnings from the sporting activity.
The investment does not buy any asset such as shares; merely a right to a share of future earnings.
If the career does not take off can my client claim a loss for tax purposes? If anything it feels like a negligible value claim for CGT may be in point. Thoughts please?
If the career does take off and my client does start receiving annual “royalty“ type payments over a ten year period how are they taxed in the UK? Ain income or capital gains?
I wonder if anyone has come across this scenario before and would appreciate contributor’s thoughts.
The investment would be in Euros directly to a bank account in the name of the sporting talent who is a national of, and resident, in another European country.
Thanks in anticipation.