BIM50680 - Athletes: Lottery Sports Fund Athlete Personal Awards: Case III liability

It is not considered that the payments made under the scheme give rise to annual payments, taxable under Case III Sch D. To be annual payments they must be:

• in the nature of income rather than capital;
• pure income profit in the hands of the recipient;
• paid under a legal obligation; and
• capable of recurrence.

The conditions of the Athlete Personal Awards have been drawn up in such a way that the last criterion is not met and accordingly the award should not be an annual payment. This does, of course, depend on the specific wording of the agreement. Questions of whether a payment is an annual payment will almost always have to be considered by reference back to first principles. Contact Business Tax (Technical) for further guidance.