Interesting tribunal decision on film partnerships
Two film partnerships recently came unstuck at a joint hearing, where the first tier tribunal decided that they were not undertaken on a commercial basis, so the partners were not entitled to sideways loss relief.
The case in question revolved around appeals by Samarkand Film Partnership No 3 and Proteus Film Partnership No 1 against HMRC’s treatment of their claimed losses. Both partnerships used the services of Future Film Capital Partners Ltd and bought or leased negatives of films including ‘The Queen’ and ‘Oliver Twist’.
In an enlightening, but complex write-up in its tax update this week, Smith & Williamson explained that while the accounting results of the film projects showed an accounting profit, the tribunal considered the net present value of the arrangements to be insufficient to demonstrate a commercial activity was undertaken.
We’re working on a more detailed explanation, but thought that AccountingWEB members might be able to help with our analysis. First - does anyone still get involved with film partnership schemes?
My impression was that the sheen has been wearing off this area and that where the provisions haven’t been tightened up, HMRC has been energetically launching investigations into film partnership loss claims. I’m still looking for the relevant legislation and guidance, if anyone is able to help.
- New Built in oven - allowable as repair? 211 3
- Anybody heard of Geniac, the new De Lorean? 120 2
- are receipts needed? 522 14
- Gift of property & improvements 139 3
- General tax book with planning 192 3
- VAT Invoice 192 6
- VAT code for invoice from not VAT registered company 276 5
- Flat rate Vat Scheme & Vat on wholesale production of Cakes and other deserts 236 9
- Error in past Corporate tax return 374 6
- Limited Company - Personal Bank Account 3,262 69
- 2013/14 failure to submit end of year submission 307 11
- Company overdue but wants to be struck off 817 32
- IHT and Swiss Property 139 1
- Sale of house with planning permission - tax free? 251 3
- Vat code for journal entries of director's expenses 170 2
- Claiming VAT and missing receipts 476 10
- HMRC overreaching its powers -again against a small surveying firm? 399 8
- Help with tax codes on Sage 265 1
- Letting relief on property transferred to a spouse 216 6
- Accounting for a finance lease 179 4
- Skandia using wrong address 1,621
- Nil Rate Band Trust - index linked debt by way of charge over property 902
- International interest certificate 513
- NOVA 369
- Have we escaped Gift with Reservation of Benfit & Pre-owned asset charges? - Gift after benefit 302
- Management expenses for investment company 268
- Bonus Bonds 262
- Entertainer withholding tax in Australia 176
- tax on apprenticeship income 176
- P11D benefit received by widow 153