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Trent Alexander-Arnold is reportedly destined for Real Madrid over staying with Liverpool (Photo by Michael Regan - UEFA/UEFA via Getty Images)(Image: Michael Regan - UEFA/UEFA via Getty Images)

Liverpool could lose Trent Alexander-Arnold this summer with Real Madrid reportedly close to finalising a contract for a free transfer.

With no new Liverpool contract signed approaching three months until his current deal expires, Alexander-Arnold is within the period of eligibility to be able to negotiate with foreign clubs such as Los Blancos.

The latest reports therefore state such talks have been moving along though are not yet completed.



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A number of Tuesday's writings on the 26-year-old explain that final details must be sealed, as does contact with Anfield chiefs directly.

Only once they are informed can the pre-agreement progress.

READ MORE:I snubbed Liverpool to join Real Madrid – this is my message to Trent Alexander-ArnoldREAD MORE:Liverpool transfer news LIVE - Trent Alexander-Arnold latest, salary revealed and replacements linked

But there is also something else more practical for the England international to consider when it comes to moving to Madrid.

As first outlined by The Independent's chief football writer Miguel Delaney, there is now a tax scheme for incoming Madrid residents established in January 2024 that will require setting up for Alexander-Arnold if he does switch to new surroundings from Merseyside.

It is known as Law 4/2024 published by the Community of Madrid and is ultimately a tax incentive - perhaps one draw for the Reds' No.66 to move there - but also it will 'potentially slow things down' according to Delaney.

Colloquially it has become known as the 'Mbappe law', as this time last year it was the France forward who was negotiating his free transfer from Paris Saint-Germain to the Spanish capital, which coincided with law's approval.

The key aim of it is to attract wealthy individuals and their families to Madrid from abroad by offering a significant deduction for personal income tax on certain assets.

Anybody arriving, as Alexander-Arnold would be, is able to establish tax residence in the city of Madrid, and that is important because so far only the capital city in Spain has adopted this law.

Spanish taxes are comprised of both state and regional rates and on the regional rate the person is able to benefit from a 20 percent deduction equal to their investment.

Capital does not need to be in Spain for this deduction to apply but what the moving player would need to ensure is that his wealth is not invested in real estate or stored in a foreign tax setup, as it would not be eligible for the scheme.

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It also requires residency in Spain to last up to six years.

So as much as this is be an incentive to players who move to Spain to play for Real Madrid as Liverpool's prized full-back may soon be doing, it requires a great of attention and must be all in order before a move is completed.