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It may be surprising to learn that almost 90% of French football stars play overseas in other European leagues, from a tax point of view, however, it is not surprising at all.
In the case of players in UK premier league clubs, the very attractive tax regulations of UK offshore financial centres such as Jersey, Guernsey and the Isle of Man play a key role in the way the contracts of the likes of Thierry Henry and Arsene Wenger are structured.
According to a study published in The Sunday Times, Arsenal have set up a very clever system to minimise the tax liability players face in the UK.
The system is quite simple: each player signs two contracts, one "onshore", which will reach the 40% tax bracket in the UK, and one "offshore" contract, which represents more than 60% of the total annual remuneration package.
The "offshore" contract uses vehicles that are available to all expats and the notion is that, if the offshore structures are good enough for Henry, Wenger and the rest, they are obviously good for expatriates in all professions.
The set up of the Arsenal remuneration package (according to The Sunday Times) uses the following offshore tools:
1. Offshore trusts.
A trust is an extremely tax efficient way to structure your assets and legally avoid a lot of the onshore tax pressure, such as capital gains tax (CGT) and inheritance tax (IHT).
The structure of an offshore trust is simple: your assets technically do not belong to you but are held under a juristic entity (typically a reputable bank or investment house) called the trustee but you (the settlor) retain complete control of decisions. Without becoming too technical, different types of trusts can be utilised, with different levels of control. The type of trust suitable for your needs can be assessed by a qualified Globaleye consultant.
By legally "wrapping" your assets under a trust a lot of the tax burden can be eliminated, while retaining full control of your investments.
2. Personalised portfolio bonds (PPBs)
Most financial institutions offer portfolio bonds through which you can invest your life savings. Basically, a PPB is an offshore tax-efficient "wrapper" and the key features are the following: - Convenience of holding all your assets in a single vehicle, thus reducing paperwork headaches for investors dealing with several investment houses all around the world.
- Significant initial and switching discounts from fund management house.
- Tax efficiency.
- Total flexibility and access to capital.
- Ability to transfer in "existing" quotable securities.
- Regular income facility.
- Access to all investment classes.
Arsenal football stars earn huge incomes but, like most of us, are concerned for the well-being and future of their families. Also, like most expats, football stars may earn more but are under more pressure to perform, and have less job security.
While on an expatriate package, you have access to broader investment vehicles and it makes sense to consult one of Globaleye's consultants on the following issues:
Protection: There are plenty of income protection, disability benefit and critical illness plans and pure level-term life insurance offerings in the market. The general idea behind these plans is that they will provide a cash lump sum in the unfortunate event of death, terminal illness, disability, etc. Often overlooked, these products are usually quite cost-effective, especially at younger ages, and they will cover you and your family for many decades. We at Globaleye can help you determine what best suits your individual needs.
Savings: It is logical to save for your retirement, your children's education or other future obligations.
Offshore bank accounts: All major banks operate offshore and can link up with most investment products we have referred to.
To ensure your portfolio is structured correctly in order to maximise performance and minimise any tax liability Contact us today.
Toll Free: 800 4558
Tel: (+9714) 3489330
If it's good for Thierry Henry, it's surely good for you. |
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