Staking +Contracts (plus a tax question)

[Guest]

Just wondering about something. Say I was staking someone into an tourney with a substantial amount of money uptop and we draw up a written contract detailing how he is to play it on his account and what the split is going to be. Would a contract like this be any way enforceable if he won and decided to scarper with the dough?
Also say he doesnt scarper and pays me my 50% or whatever. Can revenue come after me for a slice, or am I covered by the no tax on Gambling winnings yoke?

[markc]

Just wondering about something. Say I was staking someone into an tourney with a substantial amount of money uptop and we draw up a written contract detailing how he is to play it on his account and what the split is going to be. Would a contract like this be any way enforceable if he won and decided to scarper with the dough?
Also say he doesnt scarper and pays me my 50% or whatever. Can revenue come after me for a slice, or am I covered by the no tax on Gambling winnings yoke?

From an enforceability point of view a well drawn up agreement would help but probably only to the extent of getting your money back (this is a loan). As for the profit from gambling I don't see any way the court can enforce but I'll bow to the lawyers on here on that one. The court has enforced agreements in relation to the lotto for example so once it can be 100% established that the money was won as stipulated then maybe a court could enforce it?

From the tax side the profit would clearly be untaxable under current legislation..

[PokerPiper]

Just wondering about something. Say I was staking someone into an tourney with a substantial amount of money uptop and we draw up a written contract detailing how he is to play it on his account and what the split is going to be. Would a contract like this be any way enforceable if he won and decided to scarper with the dough?
Also say he doesnt scarper and pays me my 50% or whatever. Can revenue come after me for a slice, or am I covered by the no tax on Gambling winnings yoke?

Its a good question and unfortunately I don't have the answer. My feeling is that once a contract has been drawn up it becomes a legitimate business transaction. The proceeds of such as transaction would typically be seen as income. For example if it was a limited company providing the stake, then the income accrues back into the company and would be taxable. Whats different if its an individual ? I'm not sure, but i suspect it may be subject to income tax. You are facilitating somebody else to gamble but you are not gambling directly yourself. This is the drawback of having a contract. If no contract exists, then its totally open to interpretation. Its a bit of a grey area in my view. It would be good to get some insight from a finance or legal head.

[Dice75]

Its a good question and unfortunately I don't have the answer. My feeling is that once a contract has been drawn up it becomes a legitimate business transaction. The proceeds of such as transaction would typically be seen as income. For example if it was a limited company providing the stake, then the income accrues back into the company and would be taxable. Whats different if its an individual ? I'm not sure, but i suspect it may be subject to income tax. You are facilitating somebody else to gamble but you are not gambling directly yourself. This is the drawback of having a contract. If no contract exists, then its totally open to interpretation. Its a bit of a grey area in my view. It would be good to get some insight from a finance or legal head.

Would love to see the look on my accountants/the taxmans faces!

"What happened to that €10k?"

"I took it out to put myself & a few others into some poker tournaments in a business arrangement"

[markc]

Its a good question and unfortunately I don't have the answer. My feeling is that once a contract has been drawn up it becomes a legitimate business transaction. The proceeds of such as transaction would typically be seen as income. For example if it was a limited company providing the stake, then the income accrues back into the company and would be taxable. Whats different if its an individual ? I'm not sure, but i suspect it may be subject to income tax. You are facilitating somebody else to gamble but you are not gambling directly yourself. This is the drawback of having a contract. If no contract exists, then its totally open to interpretation. Its a bit of a grey area in my view. It would be good to get some insight from a finance or legal head.

The profit (if any) accrues from a gambling debt and afaik you cannot sue to have a gambling debt enforced. Whether it is an individual or a company is irrelevant. If the company did receive the income it is still not taxable income under the current tax code. There would be no difference between gambling yourself and facilitating someone else...

[markc]

Would love to see the look on my accountants/the taxmans faces!

"What happened to that €10k?"

"I took it out to put myself & a few others into some poker tournaments in a business arrangement"

Assuming a director took 10k out of the company it would be treated as a directors loan to be repaid or would be treated as salary for that director

[PokerPiper]

Assuming a director took 10k out of the company it would be treated as a directors loan to be repaid or would be treated as salary for that director

OK. I think the company thing was a bad example. I was thinking more along the lines of a company or partnership set up specifically for the purposes of staking. It is actually a big business these days. I guess its mainly syndicates however.

Its good to know that indirect income from gambling/staking doesn't come under the tax net.

[markc]

OK. I think the company thing was a bad example. I was thinking more along the lines of a company or partnership set up specifically for the purposes of staking. It is actually a big business these days. I guess its mainly syndicates however.

Its good to know that indirect income from gambling/staking doesn't come under the tax net.

It could change at some point I'd say but for now the only mention of tax on any form of betting comes under the Capital Gains Tax heading where it is specifically exempted in addition to lottery wins etc. Profits from such activities are not even considered as income under the current code.