By Kenneth H. Bridges, CPA, PFS February 2013
Is it possible to incur a marginal tax rate in excess of 100%? Under UK tax rules, that could very well be the case for a high profile athlete like the fastest man in the world, Olympic gold medal sprinter Usain Bolt.
Under UK tax rules, the worldwide endorsement income of an athlete who performs in the UK is subject to UK tax based on the number of performances in the UK proportionate to total performances for the year. For Usain Bolt and other athletes with substantial endorsement income, this could mean a UK tax liability in excess of the fee earned directly from performing in the UK. For this reason, Bolt has declined in recent years to race in the UK. However, the UK has recently announced a one-off exclusion for this summer’s London Grand Prix in hopes of attracting Bolt and other high profile athletes.
Kenneth H. Bridges, CPA, PFS is a partner with Bridges & Dunn-Rankin, LLP an Atlanta-based CPA firm.
This article is presented for educational and informational purposes only, and is not intended to constitute legal, tax or accounting advice. The article provides only a very general summary of complex rules. For advice on how these rules may apply to your specific situation, contact a professional tax advisor.