In 2017, the Australian Taxation Office (ATO) released Draft Practical Compliance Guideline PCG 2017/D11 (the PCG) to provide safe harbour measures for professional sportsperson’s who receive lump sum payments in exchange for their professional services and the use and exploitation of their “public fame” or “image”.
However, the PCG is now being withdrawn with effect from 24 August 2018. There are two main reasons behind this decision. Government had outlined in the 2018/19 Federal Budget that high profile individuals would lose their ability to take advantage of lower tax rates by licensing their fame or image to another entity from 1 July 2019. The ATO had also queried the tax effectiveness of certain arrangements under the PCG.
The ATO will not review arrangements entered into prior 24 August 2018 and existing up to 1 July 2020 provided that such arrangement was entered into and carried out in good faith, relying upon and complying with the withdrawn PCG.
If you would like advice in relation to how this change may affect you, please do not hesitate to contact our team of specialists:
Daniel Smedley
Principal | Accredited Specialist in Tax Law
M +61 411 319 327| T +61 3 9611 0105
E: dsmedley@sladen.com.au
Edward Hennebry
Associate
T +61 3 9611 0113
E: ehennebry@sladen.com.au
