UK Ingenious Film tax planning scheme fails

UK Ingenious Film tax planning scheme fails

Ingenious Film is a leading investor in the creative industries and has invested into several movies such as Avatar, Die Hard 4 or the Life of Pi. The film partnership lost the latest decision in an ongoing court dispute with HMRC.

According to BBC, investors into Ingenious Film financing schemes, such as David Beckham and Wayne Rooney, lost the legal battle to overturn a £700m tax bill. More than 1000 people invested in the Ingenious film financing schemes in the hope of securing tax relief. Media outlets have mentioned Mel C, Sacha Baron Cohen, Bob Geldof, Robbie Williams and Gary Lineker. More than 1,000 people invested in the Ingenious film financing schemes in the hope of securing tax relief.

HMRC considered that investors were claiming tax relief on artificial losses and demanded immediate payment of the avoided tax. HMRC accused the company of aiming for “relief on artificial losses from its films,” which in turn meant “the schemes were not legitimate investment opportunities but actually a means of avoiding tax.”

The Court ruled the production costs and losses eligible for tax relief should be reduced from 30% to 4%. Most of costs was not eligible for tax relief has most were capital and not revenue.

Ingenious’ choice to appeal the decision could lead to several years of litigation. According to press release: “We strongly disagree with the Tribunal’s clarification and find it wholly unsatisfactory that the Tribunal reached this decision with “misgivings and reluctance”. We will be appealing the entire decision of the Tribunal.”

Ingenious believes that the latest court ruling has been mischaracterised in press reports.

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