An obstacle which could have stopped international athletes coming to the Commonwealth Games in Glasgow this summer was removed today.

The UK Government announced that stars competing at the Sainsbury's Glasgow Grand Prix this summer will be exempt from income tax for appearance fees or bonuses from sponsors.

The event at Hampden Park on July 11-12 is happening for the first time in Scotland, and was moved to coincide with the Commonwealth Games, which start on July 23.

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Athletes like triple London 2012 Olympic champion Usain Bolt have previously limited their appearances in Britain due to rules which see them taxed on global sponsorship and endorsement earnings as well as any appearance fee.

"As soon as the law changes I'll be here all the time," Bolt said in 2012. "I love being here, I have so many Jamaican fans here and it's wonderful."

Chancellor George Osborne said today: "I want to do everything to help make this summer a summer of sporting success in Scotland. Not only is the great city of Glasgow hosting the Commonwealth Games, but also the Glasgow Grand Prix as well and the UK government will do its part to make sure both are great sporting events.

"The tax exemption the Treasury is announcing will extend the cultural and economic contribution that the Games will bring. It will also ensure Scotland continues to attract the highest standard of athletes."

Chief Secretary to the Treasury, Danny Alexander, added: "While athletes for England, Scotland, Wales and Northern Ireland will compete with one another at the Commonwealth Games, the whole of the United Kingdom wants Glasgow 2014 to be a great success. By offering this additional tax break, we hope to ensure that the best athletes will come to Glasgow this summer for both this event and the Games itself."

Lord Smith of Kelvin, Chairman of Glasgow 2014 said: "Having this Grand Prix event in Glasgow and Scotland for the first time provides an international showcase for Hampden Park, Scotland's national stadium, our Commonwealth Games venue for Athletics - as well as the great global athletes who will come to compete.

"Glasgow 2014 warmly welcomes this positive contribution from UK government which will play a key role in maximising opportunities to engage the Commonwealth's elite international athletes in what will be an exciting build-up to the Glasgow 2014 Commonwealth Games, the UK's next big sporting event."

The one-off exemption will apply to all non-UK resident accredited competitors in the event to encourage more world-class international athletes to compete in the event, and has been granted on an exceptional basis.

It will not apply to any officials, sponsors, coaching staff or UK resident athletes who will continue to be liable to UK tax on any income which is related to their participation in the event. The exemption will not cover any other taxes such as corporation tax or VAT.

As announced in January 2012, a similar income tax exemption will also be provided for accredited competitors in the Commonwealth Games, which is intended to help spread the Olympic legacy into Scotland and encourage top athletes to compete at the Games.