Zaha's Premier League return scuppered by the taxman?

David Ornstein of The Athletic reported this morning that Wilfried Zaha's proposed return to the Premier League is now in doubt, citing tax reasons behind the likely collapse of his move to Leicester City.

Although playing internationally for the Ivory Coast, Zaha lived in the UK (and would have been UK tax resident) from the age of four through to his transfer to Galatasaray in Turkey, last summer. As he did not move until the end of July 2023 (and may have already spent sufficient days in the UK to be 'UK resident' under the provisions of the UK's Statutory Residence Test), it is likely that Zaha would have applied for 'split-year tax treatment'. This would have the effect of delineating his period of UK residence and his period of Turkish residence following his move.

However, the 'split-year tax treatment' rules will normally require the individual to remain non-UK resident in the tax year following the 'split' year. If that were the case for Zaha, and he were to return to the UK this year, he risks invalidating his 'split' of the 2023/2024 tax year and, ultimately, could mean him being chargeable to both UK and Turkish income tax on some of his salary earned while playing for Galatasaray.*

Having been UK resident for more than four years preceding his departure, Zaha will likely also fall within the scope of the UK's ‘Temporary Non-Residence’ anti-avoidance rules. Under those rules, returning to the UK to resume UK tax residence after a period of non-UK residence of five or fewer tax years can trigger UK tax liabilities on certain dividends and gains generated during the period of non-UK residence.

It is a similar dilemma to that faced by Jordan Henderson earlier this year when he was weighing up a return to the Premier League after a year playing in Saudi Arabia (before eventually signing for Ajax in the Netherlands).

While there is still time for Zaha's move to be salvaged, it is another example of the importance for sportspeople and internationally mobile individuals not overlooking the potentially far-reaching impact of the UK's residence rules.

*Subject to the application of the double tax treaty between the UK and Turkey.