[NJS]

Is business law international ?

As controlling shareholder Lai is lending his UK company's money.  The regulations around this might be subject to UK law which is pretty open with most jurisdictions such as Hong Kong. 

I'm guessing the money that was loaned to the Hong Kong based Wisdom Smart company has now been loaned on to Yunyi Guokai Sports.  Perhaps Wisdom Smart exists for this purpose?

[Bilston Dan]

As controlling shareholder Lai is lending his UK company's money.  The regulations around this might be subject to UK law which is pretty open with most jurisdictions such as Hong Kong. 

I'm guessing the money that was loaned to the Hong Kong based Wisdom Smart company has now been loaned on to Yunyi Guokai Sports.  Perhaps Wisdom Smart exists for this purpose?

Money laundering in football...don't be daft!

[liverbaggie]

Just read in the financial Times that wealthy chinese are selling their high end watches etc due to the economic climate, perhaps that's another reason Lai is " borrowing" money from us!
Doesn't look good does it?
He should cut his losses with us and leave

[Droitwich Baggie]

A man with no idea

[KYA]

 On days like today, I look beyond the manager and players and think of Lai this bloke is killing our club we should have had another forward in before Dike was injured now it's just bizarre that we haven't strengthened this key position.
Each game without a replacement is costing the club points.

[paulosull]

Was reported they split the parachute payments over a budget of 3 years not the 2. Leaves more money in the bank should his Chinese enterprises require it.

have to keep his other ventures a float I suppose.

[gazberg]

have to keep his other ventures a float I suppose.

Think I saw someone on WBA Twitter refer to us as Lais 'Bank of West Brom'

[baggiejohn]

Was reported they split the parachute payments over a budget of 3 years not the 2. Leaves more money in the bank should his Chinese enterprises require it.

I'd be interested to know how they did that.

For example:

Say in year 1 we have income of £60 million, which comprises £10 million from ticket & merchandise sales & £50 million of parachute payments.
Let's then say we identify £10 milion of the income to cover for some of year 2 expenditure.
If we then have expenditure in year 1 of £50 million, we would make a profit of £10 million which is subject to tax.
How do we avoid paying tax (which would be significant) on the £10 million profit, which has, in effect, been set aside to help in year 2?

[gazberg]

I'd be interested to know how they did that.

For example:

Say in year 1 we have income of £60 million, which comprises £10 million from ticket & merchandise sales & £50 million of parachute payments.
Let's then say we identify £10 milion of the income to cover for some of year 2 expenditure.
If we then have expenditure in year 1 of £50 million, we would make a profit of £10 million which is subject to tax.
How do we avoid paying tax (which would be significant) on the £10 million profit, which has, in effect, been set aside to help in year 2?

Was intriguing to me as well John. I don't have the article to hand sadly. As i recall they planned on using the 2 years money budgeted evenly over 3. How that 2 years is distributed out i don't know personally.

[baggiejohn]

Was intriguing to me as well John. I don't have the article to hand sadly. As i recall they planned on using the 2 years money budgeted evenly over 3. How that 2 years is distributed out i don't know personally.

It's a prudent move & one you expect to be supported by HMRC, but I don't know enough about tax laws to be able to comment.
I suppose one way of doing it could be to move money out of your business in the form of a loan to another business, so you don't make a profit that year. Then the loan is repayed in the following tax year.
I really don't know, I was hoping some tax specialists on the forum might be able to help.

[gazberg]

It's a prudent move & one you expect to be supported by HMRC, but I don't know enough about tax laws to be able to comment.
I suppose one way of doing it could be to move money out of your business in the form of a loan to another business, so you don't make a profit that year. Then the loan is repayed in the following tax year.
I really don't know, I was hoping some tax specialists on the forum might be able to help.

I'm clueless on tax laws myself. Lai has been moving the clubs money about in the PL year as we now know to support his other business. He's quite possibly done it last season too as well. We wouldn't know until next years report though i guess.

[paulosull]

I'd be interested to know how they did that.

For example:

Say in year 1 we have income of £60 million, which comprises £10 million from ticket & merchandise sales & £50 million of parachute payments.
Let's then say we identify £10 milion of the income to cover for some of year 2 expenditure.
If we then have expenditure in year 1 of £50 million, we would make a profit of £10 million which is subject to tax.
How do we avoid paying tax (which would be significant) on the £10 million profit, which has, in effect, been set aside to help in year 2?

only applies to parachute payments if I’m reading it correctly.

[baggiejohn]

only applies to parachute payments if I’m reading it correctly.

So are you saying parachute payments are not taxable

[paulosull]

So are you saying parachute payments are not taxable

no I’m saying that they have spread parachute payments over three years instead of two.

[baggiejohn]

no I’m saying that they have spread parachute payments over three years instead of two.

Which is fine if they receive them over 3 years, but my understanding is they chose to set aside some of the year 2 payment for year 3. in which case, it would show as a profit in year 2 & be subject to tax.

[NJS]

If a company loans out money, it does not reduce its liability to corporation tax.  It is also taxed on any interest. 

[liverbaggie]

Does anyone know if he pays tax in UK for earned of unearned income?

[paulosull]

Which is fine if they receive them over 3 years, but my understanding is they chose to set aside some of the year 2 payment for year 3. in which case, it would show as a profit in year 2 & be subject to tax.

club set aside payments don’t think prem did , could be wrong though.

[skyclad99]

Does anyone know if he pays tax in UK for earned of unearned income?

I very much doubt that he does as he would be classed as a non domicile.

The club however is fully liable for tax.

[NJS]

Yeah, plenty will buy us but none will pay asking. At least it's been reported previously that he now accepts some kind of loss will need to be taken as long as he can recoup most of it.

Guochuan needs to realise that the longer he waits, the worse it would be.  If he had any understanding of English football then he might have a plan to improve the club's results and therefore its value but he doesn't.  So he has to sell OR try and leech as much out of the club as he can.  We're all waiting to see what happens to those loans in Jan 23.

If Wisdom Smart goes bust, I'll wager the WBA is down the list of creditors to receive anything from its liquidated assets ( if there were any tangible assets in the first place)

[gazberg]

Guochuan needs to realise that the longer he waits, the worse it would be.  If he had any understanding of English football then he might have a plan to improve the club's results and therefore its value but he doesn't.  So he has to sell OR try and leech as much out of the club as he can.  We're all waiting to see what happens to those loans in Jan 23.

If Wisdom Smart goes bust, I'll wager the WBA is down the list of creditors to receive anything from its liquidated assets ( if there were any tangible assets in the first place)

Everyone can see it but Lai. Clueless and way out of his depth

[paulosull]

Lots of owners are looking at streaming sites for future revenues , believe those who took charge of Chelski will value club at over £10 billion in next 10 years when streaming becomes the favoured format to watch games.

[baggiejohn]

Re : Cash set aside from parachute payments.

Done a bit of digging & it's possible to show "deferred income" as a liabilty on the balance sheet.

It's to cater for a situation where you've received cash in one financial year for a service that you will provide in the next.

So the cash set aside will show as deferred income & therefore excluded from tax commitments.

[gazberg]

Re : Cash set aside from parachute payments.

Done a bit of digging & it's possible to show "deferred income" as a liabilty on the balance sheet.

It's to cater for a situation where you've received cash in one financial year for a service that you will provide in the next.

So the cash set aside will show as deferred income & therefore excluded from tax commitments.

Thanks for clearing that up John, appreciate your efforts.

[skyclad99]

Re : Cash set aside from parachute payments.

Done a bit of digging & it's possible to show "deferred income" as a liabilty on the balance sheet.

It's to cater for a situation where you've received cash in one financial year for a service that you will provide in the next.

So the cash set aside will show as deferred income & therefore excluded from tax commitments.

I do find it strange that we are putting money aside for next year if Lai is desperate to get us promoted. I would have thought that the money could have been put to good use by strengthening the squad to make sure we go up. It’s almost as though he is planning for another year in the championship, unless he has personally earmarked it for himself....