Two of the new Phoenix owners, Gareth Morgan, left, and Rob Morrison, right. In the centre is Football Federation Australia boss Lyall Gorman.

The new owners of the Phoenix football franchise could structure their affairs so that they are able to claim tax deductions on the loss-making club, tax experts say.

However, one of the new Phoenix leaders says a structure that could be suitable for the consortium members to use tax losses might be cumbersome and could hamper the group's longer-term plans, potentially including part-ownership by fans.

The group of seven Wellington businessmen, including Kiwibank chairman Rob Morrison and economist Gareth Morgan, took over the Phoenix licence last week after troubled property developer Terry Serepisos was forced to relinquish it.

Dubbed the Welnix consortium, the group is still working through how it will be legally structured though it has set up a lawyer's trust account to cover expenditure such as making payments to players.

Group chairman Rob Morrison said the seven were unlikely to make one cent out of their commitment to fund the club for the next five years, and any profits they did make would be ploughed back into the club.

Group member Campbell Gower, owner and chief executive of baby buggy company Phil& Teds, has also confirmed he doesn't expect the Phoenix to be profitable. But as local business people, the group was motivated by doing something for the region, he said. "We want to make it a successful enterprise rather than a profitable business.

"There's some smart people around that table, they're quite used to being involved in successful entities."

None of them had gone into it on the basis that somehow there were tax benefits available.

It was "actually very difficult, if not impossible" to allocate tax losses from one business to another, he said.

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.

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.

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