More Sports Players To Hit Tax Trouble - Wealth Advisor

Tom Burroughes Group Editor London 25 January 2019

More Sports Players To Hit Tax Trouble - Wealth Advisor

Ronaldo's fine for tax fraud in Spain grabs headlines but he's unlikely to be the last such figure to be dragged into the legal net, an advisor says.

Soccer superstar Cristiano Ronaldo agreed this week to pay an €18.8 million ($21.3 million) fine and accept a suspended jail term to settle a tax fraud case in Spain. Other sports figures could fall foul of rules via unnecessarily complex investment schemes, an advisor warns.

The charges against the Juventus player relate to unpaid tax between 2011 and 2014 (when he was at Real Madrid). It has been claimed that Ronaldo had used an offshore company to conceal his total income from the Spanish authorities, as well as falsely reporting income from real estate sales that lowered his tax rate. He joins a list of soccer players and associated figures who have been pursued for tax offences by European authorities in recent years. 

These cases suggest sportsmen are being poorly advised, greedy or foolish in managing money, and also preyed on by unscrupulous advisors.

How can the industry do a better job of preventing such persons fall over the line in future?

“All too often the sportsperson or celebrity takes little interest or has little understanding in how their money is being managed. And the tax ‘savings’ they are offered become highly alluring. For many of these individuals they would be best suited sticking to a far simpler and transparent investment plan, which is often seen as boring. Until then, I would imagine we will see many more cases of celebrities losing money in badly advised investments,” Jonathan Gold, executive director at London & Capital, told this publication.

“Often there was an honest intention from the outset for them to make legitimate investments, but the tax advantages have been promoted above everything else. Unfortunately, when they go wrong it can be very expensive, and often the investor has spent the tax rebate. Of course the media will pick up on celebrities who have been caught by this, and the public doesn’t have much sympathy for rich people getting caught out trying to avoid tax,” Gold said.

Register for WealthBriefing today

Gain access to regular and exclusive research on the global wealth management sector along with the opportunity to attend industry events such as exclusive invites to Breakfast Briefings and Summits in the major wealth management centres and industry leading awards programmes