Eclipse 35 Vows to Fight HMRC
As HMRC continues to ramp up its drive to tackle tax avoidance by high-net worth individuals, two film investment schemes have come under the spotlight.
The latest - the Eclipse 35 film investment partnership, with 289 members – including footballer managers like Sir Alex Ferguson - tried to claim tax relief on a complex £1bn deal with Disney. HMRC took the case to court and won (Eclipse Film Partners No 35 LLP v HMRC (No 3)).
But in a letter dated 25 April to the 289 members of the Eclipse 35 film investment partnership, seen by Accountancy Live, it says it will be holding partnership meetings at the offices of Future Capital Partners Ltd (FCP) to discuss the available options.
These are essentially to appeal the decision by June 15 - or accept the ruling. It has said it will ‘appeal the decision vigorously’.
It went on to advise members that should HMRC approach them ‘you should contact us immediately and we will send you a pro-forma appeal and postponement application.’
Had the Eclipse 35 scheme been successful each of the partnership’s 289 members could have secured around £400,000 in tax relief on a personal investment of £173,000.
Another scheme under HMRC investigation is Ingenious Film Partners 2 LLP, whose members invested in financing Hollywood films. They shared in the profits if the movies did well but also benefitted from generous tax reliefs.
Referring to the Eclipse 35 scheme, an HMRC spokesman said: ‘HMRC is pleased with this decision, but as the matter may be the subject of an appeal we cannot comment further at this stage.’
The clampdown on film schemes is part of a wider crackdown on tax avoidance. He added: ‘Nearly a billion pounds was made available to HMRC to tackle avoidance, evasion and fraud. We are focusing on closing down aggressive avoidance schemes which deny the UK vital funding by getting around the will of parliament.’