HM Revenue and Customs's announcement on budget day regarding the restriction of tax relief on film investment schemes has dealt yet another blow to the British film industry, according to professional services firm KPMG.
Commenting on the announcement, Lucy Elwes, senior tax manager KPMG’s UK media practice, explained that the new measures will mean that it will no longer be possible for individuals to offset losses from their film investments against their other income, unless they play an active part in the management of the film business.
“Similar legislation was introduced in last year’s budget to close down tax relief on losses incurred by partnership film businesses. The new legislation targets individuals seeking to shelter otherwise taxable income," Elwes stated.
“The UK film industry has benefited a great deal in recent years from the flow of investment through tax-driven structures. While today’s announcement won’t come as a surprise to the industry given HMRC has made no secret of their dislike of these types of arrangement, it will undoubtedly have a negative effect on the funding of the British film industry," she concluded.
A comprehensive report in our Intelligence Report series examining tax-sheltering arrangements for investors, including Venture Capital, Forest Finance, Film Finance, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report5.asp
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