Investors in a venture that bought the rights to two Walt Disney films have lost their appeal as to whether they should get tax relief.
Eclipse 35, a scheme promoted by Future Capital Partners, is one of 31 Eclipse partnerships and is the first scheme to be taken to litigation.
287 wealthy individuals invested in the scheme in order claim tax relief on their general income. The rights to two Disney films, Enchanted and Underdog, were bought after investors ploughed £50million into the scheme. This totalled £840million after loans were also taken out. The films were then subleased back to Disney.
In 2013 the Upper Tax Tribunal ruled that the scheme did not deliver tax relief, despite it being marketed as such. As a result, Eclipse 35 highlighted 11 grounds of appeal however the courts dismissed these appeals on 17th February 2015 on the grounds that the scheme did not deliver tax relief as it was not trading.
The decision from the Court of Appeal leaves the investors of the scheme liable to pay tax bills and according to claims these could be between four and nine times more than the original investment. However, there is no evidence to suggest investors knew how the scheme was being managed.
Financial Secretary to the Treasury, David Gauke said “The Government is committed to tackling tax avoidance schemes like Eclipse.
“These schemes, which were all too common in the mid-2000’s, are an affront to the vast majority of businesses and people who pay what they owe.
“The Government has invested £1 billion in HMRC to track down and challenged tax dodgers and they will continue to pursue the minority who do not play by the rules.”
A spokeswoman for Future Capital Partners said they had no authority to discuss tax affairs.
If you have been involved in a scheme similar to that of Eclipse 35 and have been contacted by HMRC or expect that you may be contacted due to your involvement in an avoidance scheme, then call KinsellaTax today. We can help you. Our specialists have experience of dealing with HMRC in these situations. Call us today on 0800 471 4546 or fill out our contact form and one of our specialists will contact you.