personal finance

Would I be liable for tax if I sell my Wimbledon centre court tickets?


I recently purchased a Wimbledon centre court debenture for 2021 to 2025. Each year, my debenture will entitle me to 15 tickets which, if I don’t use myself, I am allowed sell to individuals or corporate hospitality agents. If I do decide to sell these tickets (or even the debenture itself), am I required to pay tax, and if so, at what rate?

James Bradford, private client partner at law firm Charles Russell Speechlys, says that the tax treatment of onward sales of debenture tickets is not always as straightforward as one might expect.

The first question to ask is what you actually own. A Centre Court debenture technically represents a loan by you, the debenture holder, of £2,000, which you paid together with a non-repayable premium of £65,000 plus VAT.

The loan and the premium entitles you to 65 tickets over the debenture’s lifetime: in effect a five-year season pass for the championships. Debenture tickets are the only Wimbledon tickets which are legally allowed to be sold on a secondary market and, particularly if demand for tickets is high, sales can be extremely lucrative.

James Bradford, private client partner at law firm Charles Russell Speechlys © Handout

According to the 2021-25 Centre Court Debentures Prospectus, the debenture is a qualifying corporate bond (QCB), which means it should be treated as a normal commercial loan.

Importantly, QCBs don’t attract capital gains tax when they are transferred. The prospectus also notes that the debenture is a “wasting asset” and as with, for example, cars, no capital gains tax should be payable on a sale of the debenture itself (although VAT might be payable by the buyer). So if you sell your debenture in its entirety and at a profit, the sale proceeds should be exempt from capital gains tax.

However, the tax treatment on a sale of individual tickets is more complicated. Your debenture only confers the right to a small capital repayment, meaning the majority of the value would appear to derive from the right to watch tennis. Instinctively, based on the legislation, one would expect tax to be payable if you sell your tickets for more than you purchased them, although there is some debate as to whether such a sale would be subject to capital gains tax or income tax.

While HMRC has not provided any formal public guidance on the issue, it confirmed to us that the proceeds of the sale of tickets would be treated as capital sums derived from ownership of the debenture, and that such sales would be exempt from capital gains tax, as with the sale of the debenture. It also noted that income tax would only be applicable if you sell your tickets in the course of a trade — for example if you repeatedly sell them with an intention to profit.

In any case, if you do decide to sell your Wimbledon debenture seats (or indeed any other types of debenture, for example at Twickenham or The Royal Albert Hall, which are structured differently) you would be wise to seek suitable advice or bring the sale to the attention of the person who completes your tax return as evidently the tax treatment is not always as obvious as you might think.

Mihir Kapadia, chief executive of investment management firm Sun Global Investments, says debenture tickets are the only ticket types eligible for resale, and the regular or ballot tickets cannot be resold.

Mihir Kapadia, chief executive of investment management firm Sun Global Investments © Handout

The debenture holder has the freedom to sell their tickets however they wish — for specific days or for the whole season, at any marketplace, including at Wimbledon’s official debentures marketplace. Because of their flexibility, debentures regularly change hands, often multiple times, and increase in value each time. Therefore, they have moved on from being a tennis fan’s season pass to a valuable investment vehicle for those with deep cash to spare.

They can deliver a return in value anywhere between 30 per cent to 60 per cent in general, or in some cases more than 100 per cent. In contrast, a stock market investment in the same period would perhaps yield about 25 per cent under a best-case scenario.

Second, they are perhaps one of the only low-medium risk and high reward investment vehicles in the market. If you are purely looking at it as an investor and not a tennis fan, the key to maximise returns would be in selling tickets by the day.

As the tournament progresses, you can capitalise further on the fixtures. The real value rises from the quarter-finals and onwards, and if there is a top seeds clash, it would likely be a blockbuster return. In such cases a corporate hospitality agent would perhaps offer the best bids, and it is important that you work with a trusted company. The risk involved here is how the tournament develops: should people lose interest with the players, or if the big guns are knocked out early, the value of tickets could drop considerably.

There are also specialist brokerages and auction houses which can assist in getting the best deal possible, although some of them may deal only with the complete debenture and not individual tickets. One such brokerage is Dowgate Capital, which runs weekly auctions.

The opinions in this column are intended for general information purposes only and should not be used as a substitute for professional advice. The Financial Times Ltd and the authors are not responsible for any direct or indirect result arising from any reliance placed on replies, including any loss, and exclude liability to the full extent.

Do you have a financial dilemma that you’d like FT Money’s team of professional experts to look into? Email your problem in confidence to money@ft.com

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