Running the Phoenix may not cost The Seven anything....
However Ernst & Young tax partner Jo Doolan said depending on how the consortium was structured it should be able to offset some of its losses on the Phoenix against other income.
If it was set up as a limited liability company that could be challenging. But there were other options, such as a look-through company. The new LTC structure allows the company in question to transfer its income and expenditure to its shareholders directly. The shareholder, not the company, is then responsible for paying tax on their share or they can utilise the LTC's losses.
BDO tax partner Iain Craig said other options were a joint venture or a limited liability partnership. Commonly used overseas, limited partnerships were introduced in New Zealand in 2008 and allow investors to enjoy the benefits of limited liability protection but preserve the tax advantages of partnerships.
Craig said if the Welnix consortium was guaranteeing any debt it would need to charge a fee for doing so, if it wanted to claim a deduction on any potential losses. Otherwise investors can find themselves with a non-deductable capital loss when a guarantee gets called in. That's a trap that's cost many individuals.
Morrison said a structure that could be suitable for the consortium members to utilise tax losses might be more cumbersome and could hamper the group's longer-term plans to get more capital further down the track. That includes potentially following overseas models of offering part-ownership for fans.
FFS forget about fan capital. Take all the tax writeoffs you can get!!!
</span><div ="inlinedisplayname">Rob Morrison:�
"Phoenix till they lose"
The way some of us talk on here, 