Tennis star Andre Agassi has won his case against the Inland Revenue in the Court of Appeal, but may yet end up the loser.
Agassi is not a resident of the UK and sought to avoid a tax assessment made by the Revenue on the grounds that his UK sporting income, which was paid to a non-resident company controlled by him but which had no place of business here, was not taxable.
There is a specific tax legislation which deals with sportsmen and entertainers, who typically travel the globe, working in many countries in any tax year. In the UK, this will impose a tax charge on earnings arising here when the payment is made direct to the sportsman (even where the payee has no UK presence) or when payments are made to associated companies provided the payments were made by a person with a 'tax presence' (normally a place of business) in the UK.
However, Agassi's affairs were so organised that the payment was made to a non-resident company with no UK tax presence which then paid them on to a company which he controlled. Accordingly, the income was not caught by the UK tax law and his appeal against tax assessments was allowed.
In the UK, the legal costs of the winner of a case are normally paid by the loser. However, a very large proportion of Agassi's costs were incurred by tax specialists in the accounting profession. At the time of writing, the court has declined to make an order to allow Agassi to recover those costs, which he would be entitled to do had he taken his advice from solicitors, so despite winning the case he may well end up substantially out of pocket.
