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28 Nov 07 Footballers' management fees deductible - Spriggs, Riddell

The Federal Court (Gordon J) has held that management fees paid by 2 professional footballers (Spriggs, an AFL player, and Riddell, a Rugby League player) were deductible under s 8-1 of ITAA 1997. The fees were paid to management companies for services performed in negotiating playing contracts for the players. The Court held that the playing contracts facilitated the generation of income and were thus deductible under the first positive limb of s 8-1. The Court noted, in this regard, that the fact that the players were employed did not preclude expenditure from being deductible under the first positive limb. Further, the Court rejected the Commissioner's argument, relying on FCT v Maddalena (1971) 45 ALJR 426, that the fees were incurred at a point too soon to be incidental and relevant to the income producing activities of the players. Finally, the Court rejected the Commissioner's argument that the payments were capital or of a capital nature.

Riddell v FCT [2007] FCA 1818, Spriggs v FCT [2007] FCA 1817 (Federal Court, Gordon J, 23 November 2007).

For a copy of Riddell, go here

For a copy of Spriggs, go here

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