The Hidden Tax Risk When Footballers Move Abroad With Image Rights Companies

How Image Rights Structures Typically Operate

Many professional footballers operate through an image rights company.

The structure often involves:

• A company owning commercial rights
• Sponsorship income paid to that company
• Separate employment income paid by the club
• Licensing agreements between the player and company

In principle, this separates employment from commercial exploitation.

In practice, the structure must reflect commercial reality.

Tax authorities assess substance, not labels.

Why Residency Changes Alter Treatment

When a footballer moves abroad:

• Personal tax residency may change
• Corporate residency may remain in the UK
• Club location may shift
• Sponsorship arrangements may span jurisdictions

These variables interact.

If the individual becomes non-resident but the company remains UK resident, different tax rules apply.

If corporate management and control shifts, residency of the company may be questioned.

Cross-border movement complicates everything.

The Substance Question

Image rights structures must demonstrate:

• Genuine commercial value
• Independent brand exploitation
• Market-rate agreements
• Proper documentation

When a player moves to a new country, authorities may examine:

• Whether commercial value persists
• Whether services are performed in the new jurisdiction
• Whether income allocation reflects activity

If structure and reality diverge, scrutiny increases.

Residency changes test substance.

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Cross-Border Income Allocation

When playing abroad, image rights income may relate to:

• UK sponsors
• Overseas sponsors
• Global endorsements
• Club-related marketing

Tax allocation depends on:

• Where services are performed
• Where the company is resident
• How treaties apply
• Local anti-avoidance rules

Without coordination, income may face:

• UK corporation tax
• Overseas personal tax
• Double taxation risk

Mobility increases allocation complexity.

Corporate Residency Risk

If management and control of the image rights company shifts overseas:

• Corporate residency may change
• UK tax treatment may alter
• Exit charges may arise

If the player relocates and makes key decisions abroad, questions may arise about corporate central management.

Corporate residency must be reviewed alongside personal residency.

Ignoring this interaction creates exposure.

Employment And Image Rights Interaction

Clubs often structure contracts to separate:

• Employment salary
• Image rights payments

When moving abroad, overseas clubs may treat image rights differently.

Some jurisdictions:

• Do not recognise similar separation
• Apply different withholding
• Scrutinise corporate arrangements

Contract drafting must align with local law.

Assuming consistency across jurisdictions is risky.

Double Taxation And Withholding

Image rights income may be:

• Subject to UK corporation tax
• Subject to withholding abroad
• Attributed to personal services
• Affected by treaty rules

If not coordinated properly, income may be taxed inefficiently.

Relief mechanisms may exist, but they require compliance and documentation.

Cash flow pressure can arise.

Cross-border image rights income must be sequenced deliberately.

The HMRC Scrutiny Factor

Image rights arrangements in football have historically faced scrutiny.

Moving abroad increases attention because:

• Structures change
• Income flows shift
• Residency claims are tested

Poor documentation or misalignment between contract and activity increases risk.

Substance must align with structure.

A Practical Cross-Border Image Rights Checklist

Before relocating, confirm:

• Corporate residency status
• Management and control location
• Sponsor contract allocation
• Local treatment in new jurisdiction
• Double tax treaty implications
• Documentation robustness

If these are unclear, structural weakness exists.

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Why Planning Must Anticipate Mobility

Football careers involve movement.

Structures built assuming permanence in one jurisdiction often fail when tested by relocation.

Image rights companies must be designed with mobility in mind.

Sequencing matters.

Changing residency after establishing structure requires review.

Ignoring mobility increases exposure.

The Strategic Objective

The objective is not aggressive structuring.

It is resilience.

Image rights arrangements must:

• Reflect commercial substance
• Align with residency
• Survive cross-border scrutiny
• Integrate with employment contracts
• Protect long-term capital

Football careers are mobile.

Structures must travel with them.