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The cost of selling up West Ham

West Ham owners agreed to windfall tax with the government if they sold the club before 2023.

Under the terms of the London Stadium concessionaire agreement signed in March 2013, they must pay the stadium owners a share premium if they cash out with the first ten years.

If West Ham is sold before March 2018 the following calculation are made. If the sale price is £125m or less then no tax is due, 7.5% tax is charged between £125m & £150m, 10% tax between £150-£200m & 20% tax between £200-£300m with anything above £300m meaning 30% tax.

The owners are able to deduct their shareholder loan balance of around £60m before the calculations are made. These shareholder loans are due for repayment on the 1st January 202o.

Mike Ashkey is said to value Newcastle at £380m but has yet to receive a proper bid so far. In the current market and with the toxic nature of the West Ham brand at the moment I think they would be lucky to get £400m if it went on the market today.

Selling for £400m before March this year would cost them nearly £39m in windfall tax

If West Ham is sold after March 2018 but before March 2023 the calculation slightly differs.

Again £125m or less no tax is due, 7.5% tax between £125m & £150m, 10% tax between £150-£200m & 12.5% tax between £200-£300m with anything above £300m costing 20% tax.

A £400m sale after March 2018 before January 2020 would cost them just over £27m in a windfall tax.

A £400m sale after  January 2020 before March 2023 would cost them just over £39m in a windfall tax.

A £400m sale after March 2023 will cost them no windfall tax.

 

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About Sean Whetstone

I am Season Ticket Holder in West stand lower at the London Stadium and before that, I used to stand in the Sir Trevor Brooking Lower Row R seat 159 in the Boleyn Ground and in the Eighties I stood on the terraces of the old South Bank. I am a presenter on the West Ham Podcast called MooreThanJustaPodcast.co.uk. A Blogger on WestHamTillIdie.com a member of the West Ham Supporters Advisory Board (SAB), Founder of a Youtube channel called Mr West Ham Football at http://www.youtube.com/MrWestHamFootball, I am also the associate editor here at Claret and Hugh. Life Long singer of bubbles! Come on you Irons! Follow me at @Westhamfootball on twitter

18 comments on “The cost of selling up West Ham

  1. Are your sums correct Sean?
    In your example, a £400mill sale (after March this year) would result in the valuation being £340mill once the ‘loans’ of £60mill have been deducted.
    Surely 20% of £340mill is £68mill, as opposed to the £25mill quoted.
    Or am I missing something?

    • It has an accumulative effect like income tax so the first £125m tax free then 7.5% on the next £25m, 10% on the next £50m, 20% on the next £100m and 30% on anything over £300m.

      So that works out £400m – £60m shareholder loans = £340m net equity Before that March

      First £125m = Zero Tax
      £125-£150m= £1.87m
      £150m-£200m=£5m
      £200-£300m=£20m
      £300-340m=£12m

      After March 2018 but before Jan 2020

      First £125m = Zero Tax
      £125-£150m= £1.87m
      £150m-£200m=£5m
      £200-£300m=£12.5m
      £300-340m=£8m

      After Jan 2020 when the £60m of loans is paid off they will owe another £12m in tax on top of the £27m

      Hope that makes sense now

  2. Hi guys,
    Newbie here…
    I thought i heard that the owners turned down a bid of over 600M from red bull?
    400M seems awfully low in my opinion..

    COYI

    • I think you’ll find BH that the £650mill enquiry by Red Bull quoted by Sully was the result of too much cheese the night before, a figment of his imagination, or fever-dream perhaps😂

      • I don’t believe there ever was a bid for 650m or tor that matter any amount,nobody would bid that and Sullivan would have never turned it down,the club owes so much now with mortgaging everything we have and a stadium that isn’t fit for football,that will hit our value

  3. All these numbers clearly say one thing…ALL THEY CARE ABOUT IS MONEY …not the club IMO

  4. I have to say, ‘so what’ to any of the tax sums. The pair got control of the club for a valuation of £105million. After getting the deal of the century, to move to the London Stadium, if the valuation is now £400 million, they’ve at least quadrupled their investment and all of the tax figures seem measly in comparison.

    • You sound as though you know the sums involved. What happened to the £100m+ debt after the Daves bought the club?

      • The accounts are published in a few weeks, but as I understand it, most of the 3rd party debt has now been replaced by interest bearing loans from the directors.

      • CB holdings claimed the debt was 38 million !! Fact !!!
        Sully six it was 110 million !! ? The exact amount of the balance left to buy the remaining 50% shares in C+B holdings wallet ?
        With a option at the time to acquire over a four year period ?
        Anyway you look at it were here today in the shyte due to their lies !! Fact !!!
        😈😈😈😈😈

  5. TW, although huey, louy and duey all say they are WHU, I cannot get out of head that it is the almighty £$€¥ that controls their naive supporting minds. They are in it to make às much money as they can. They continue to preach how they are going to spend big each year but in comparison to other teams at WHU level, they pail into insignificance. Ironically the Sun say that WHU are interested with every footballer under the age of 70, funnily enough and ironically Brady has a column in that paper, seems to be a conflict of interest there methinks. In my opinion their vision is not to get as high as possible but happily stay in the 7-12 place region, for minimal outlay to achieve maximum profits.

  6. There’s ways around this….i.e they sell the club for £125 million incurring zero percentage, yet at the same time the new buyer has to buy another of Sullivan’s smaller businesses at a massively over inflated price for say £300 million. G&S Sullivan walk away with £425 million without having to pay the LLDC and the new owner gets the football club and dissolves the aforementioned business it also bought for £300 million

  7. What they invested in this transfer window on a threadbare squad shows where their priorities lie.

  8. £650m number came from Jack Sullivan, Red Bull press office later denied it, Gold was also unaware. I am doubtful personally whether there was a bid of that ammount

  9. I thought the debt was around £90 million. In any case I assume the “owners” can both extend the debts repayment date and put in more of their money ( to buy players etc) and increase the debt to not only get a decent 7% return but reduce this “tax” on sale.

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