Professional sportspeople: your management fees may now be tax deductible!

Posted: 19/06/2009 On 18 June 2009, the High Court of Australia ruled that management fees paid by professional footballers were tax deductible under the Income Tax Assessment Act 1997 (Cth). In a unanimous decision, their Honours held that: * there was a sufficient connection between the management fees (the “outgoing”) and the gaining or producing of assessable income from “the business of exploiting sporting prowess and associated celebrity”; and * the management fees were “appropriate and adapted for the carrying on of the appellants' businesses [and] were necessarily incurred in carrying on those businesses.” An in-depth review of the High Court’s decision will feature in RLR's next issue of illuminate.