We all admire sportswomen and men striving to achieve excellence in their chosen sports. The rewards are personal – huge levels of achievement. There is also global and national recognition. And then there are the elusive medals.
For some winners, their home countries also make cash awards. It's difficult to obtain precise details of the cash payments, but it looks as though Malaysia promises its medallists $600,000. Other countries, such as Russia and Italy, offer around $190,000 for gold medals. In the USA, the figures are lower with $25,000 for a gold medal, $15,000 for silver and $10,000 for bronze.
And then of course there's the value of the medal itself.
Many countries, including the UK, have complex rules for taxing prize money but the USA is unusual in that its tax authority – the Internal Revenue Service – charges US taxes on both the value of the medal and the amount of the monetary award.
Over the years, there have been several attempts in the USA to change the law so that Olympic awards and medals can be enjoyed by the winners without taxation. All those attempts have failed; and taxes are still payable. Indeed, we hear rumours that the IRS has sent its own team to Rio, not to compete in the Olympics, but to liaise with the American winners and their advisers over the amount of tax due.
We haven't been able to get to the bottom of that but one thing is clear. If Team GB is to compete against the US for the top position in the Rio league table (although, being realistic, is unlikely to get to the top of the table), then we certainly don't want to see the UK tax authorities copying the IRS in taxing our medal-winning contestants.
If you would like to discuss any of the points raised, please contact George Bull.