Footy membership tax deal dubbed a rort

FOOTY fans are being induced to claim tax deductions on club membership payments, triggering accusations of a “rort”.

The scheme is devised to discourage supporters cashing out 2020 membership fees worth more than $250 million.

Clubs are telling supporters they can pledge all or part of their fees as a “donation” to the Australian Sports Foundation, requesting they be passed on to their team’s “sustainability” fund.

The foundation takes 5 per cent, with the remainder going back to the AFL club.

Because it is a “donation”, the supporter can then claim a tax deduction — between 15 and 45 per cent.

For a member with a standard $400 season pass, the club would pocket $360 and the average fan would receive $130 back. A supporter with a $1000 membership could claim about $450.

Melbourne University taxation specialist Ann O’Connell said Australians struggling in the COVID-19 crisis should not have to prop up the AFL competition. The foundation was supposed to encourage grassroots sports, Professor O’Connell said.

“It should be viewed as a rort,” she said. “It is clear that it was never intended that any membership payments to AFL clubs would be tax deductible.”

An Australian Taxation Office spokeswoman said members who choose to donate their refunds can only claim a tax deduction “if they . . . have not received, and will not retain, any member benefits in return for their donation, including any form of preferred member status in current or future years”.

Adelaide is offering members a tax deduction on pledges, while promoting that they can retain a reserved seat for season 2021, maintain their “consecutive years of membership” status and can even access games this year.

“The fact that the member receives other rights, including priority rights in future seasons, means that the payment is made under a contract, for consideration — it is not a gift,” Prof O’Connell said.

She said the arrangement was likely to “compromise the whole concept of gift deductibility . . . and may attract the rules around tax avoidance”.

Foundation chief executive Patrick Walker said the issue was one of financial sustainability for clubs.

“You cannot make a donation and have any benefits linked to it,” he said.

But Mr Walker said he did not believe incentives to fans under the scheme amounted to a “material benefit”.