HMRC Wins Another Case Against Film Finance Arrangement
Friday, March 17, 2017
HM Revenue and Customs (HMRC) has won a tax avoidance case against another film partnership tax avoidance scheme.
The schemes acquired interests in The Queen and the Roman Polanski remake of Oliver Twist. The ruling protected more than GBP26m (USD32.1m) of taxpayers' money, HMRC said, but said the decision could result safeguard GBP286m.
The Court of Appeal dismissed appeals from Proteus Film Partnership and Samarkand Film Partnership, upholding a previous judgment that they were not trading and no tax relief was due.
The film partnership schemes were marketed to wealthy people, many of whom were resident but not domiciled in the UK. The arrangements sought to allow scheme users to get an upfront repayment on the tax reliefs and escape tax on the income generated, HMRC said.
The court confirmed HMRC's view that the partnerships were not trading and there were never any losses available to investors to reduce their tax bills. "This scheme deliberately sought to exploit the tax reliefs put in place to help boost the British film industry, but it didn't pay off," said Jennie Granger, Director General, Customer Compliance.