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.
- Tax deductable portion of home rental cost 188 9
- JIEB Exams 129 1
- RTI 83 1
- Christmas party 95 1
- Am i Liable? 103 4
- Fee agreed but client disagrees on amount 737 10
- Checking a contract 289 8
- Flat Rate Scheme 309 15
- Altered PAYE cheque 227 5
- deleting customers on Sage 50 156 7
- VAT on garage rent 322 14
- Value-shifting 62 1
- Pattern for CTA 206 4
- Debiting private use proportion to directors loan account 448 18
- SDLT exemptions/reliefs 83 2
- Incorrect Accounts. Is it worth taking action against the old accountant? 223 3
- Film Partnership Enquiries - am I just unlucky? 240 5
- EBT 177 1
- Giving a seminar 528 28
- Joint Filing Help 110 1
- Desperately seeking Susan, Sam or anyone with any other name 1,207
- Experience with Islamic investor following Sharia-compliant rules? 607
- Darwinpay Partnership Assessment 405
- S464A Charge to tax: conferring benefit & BIK 313
- Bank interest in 'near' facility recall situation 192
- Agent fees to sell business 188
- Alphabet shares 188
- ACCA continuity of practice arrangement needed 181
- Quirky thread of the year: Community Awards 173
- VAT codes In Sage. Am I correct? 162