s481 - Film Investment

Fitz123

Not 100% sure if more appropriate to here or taxation forum, but felt would get better responses to it here.

Have heard some info about this type of tax saving investment, usually sold by some accounting firms. You put in some of your own money, with a bank loan making up the balance. Term of about 1 year, the bank are repaid by the film production company and you receive your return through PAYE relief on the total investment. I heard you make a return of about 22%, which should be relatively secure as the films are supposed to be presold (Though of course there are risks involved) I think thats how it broadly works !!

Going to contact one of the providers of these schemes, but just wondering has anyone here partaken in such a scheme, and how did they find the experience ? Any issues etc ?

Cute Hoor

You have it pretty much spot on fitz, there has to be a certain amount of risk, otherwise it wouldn't be kosher, but it pretty much works like clockwork, and you dont really have to worry about the repayment of the loan, it's all looked after for you by the financial institution. A few forms to be filled in, and evidence of address and copy passport as you'd expect with any financial transaction

Here’s how it works, assuming you have €50K taxable income at the higher rate (41%) - can be scaled down for smaller amounts obviously.

Finance Loan Facility €33,300
Investors own funds €16,700
Total Investment €50,000

Sale Proceeds €35,340 (min of 12 months later)
Loan Repayment €35,340
Balance Outstanding €0

Own Funding €16,700
Income Tax Refund €20,500 (€50,000 @ 41%)
Net Gain €3,800
% Gain 22.75%

Horwath Bastow Charleton are one of the main people involved in this section 481 - I hope it's OK for me to post up their name, and I have no connection whatsoever with them.

Fitz123

Just to update on this thread, have entered a scheme with HBC (again apologies if we are not allowed to name.) Haven't gotten my cert as yet in order to claim back the tax, but I believe I will get that soon.

An interesting scheme, with quite a good return for a (relatively) low risk.

skafish

It all sounds very interesting. Can you give more details, or a link to companies involved?

Thanks

Cute Hoor

skafish wrote: »

It all sounds very interesting. Can you give more details, or a link to companies involved?

Thanks

It's all explained here
http://www.crowehorwath.net/crowe-horwath-globalIE/services/tax/Film.aspx

kdowling

all sounds great unless like the investors on "treasure island" it doesn't get made on time and you are liable to the full amount invested + bank loan!

Cute Hoor

There is a report in today's SBP that Section 481 investors who helped finance 'Camelot', will share in an €18.7 million windfall with the wind up of RT Film Productions (the makers of Camelot).

Anybody know anything about this?

gordongekko

S481 is being phased out in 2016

Cute Hoor

S481 has been extended to 2020, but from 2016 it is a tax credit model where the production company gets the tax break.

This has nothing to do though with the winding up of Section 481. Camelot was made with Section 481 money from 2010 to 2012, so it appears that those investors are entitled to a slice of the cake with the winding up of RT Film Productions, the producers of Camelot

gordongekko

Cute Hoor wrote: »

S481 has been extended to 2020, but from 2016 it is a tax credit model where the production company gets the tax break.

This has nothing to do though with the winding up of Section 481. Camelot was made with Section 481 money from 2010 to 2012, so it appears that those investors are entitled to a slice of the cake with the winding up of RT Film Productions, the producers of Camelot

correct

cruhoortwunk

I was reading about this at:
https://www.crowehorwath.net/IE/services/tax/Film.aspx

It mentions, 'The investor should ensure that they have sufficient income taxable at the marginal rate to enable them to claim relief at the top rate on the entire amount of their investment'

So how much would one want to be earning to make this viable?