Investors there are many good reasons to invest in the UK film industry

Tax Efficient Investment Opportunities

As well as being a fascinating industry in which to become involved, a number of tax advantages have been made available for both individual and institutional investors. As well as making full use of these advantages on behalf of our investors, Gizmo Films seeks to work closely to keep all investors fully informed of the progress of our projects. We seek to make films in a cost effective way without compromising on quality, and our extensive contacts in suppliers of complementary investment streams, production, marketing and distribution ensure that whilst producing films of outstanding quality and integrity we maximise  the  opportunity to make our projects profitable. We never seek to use offshore or complex tax schemes and only work with the HMRC’s own promoted schemes for investors and we always obtain advance approval that everything we do is approved by the HMRC.

The Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme was created and promoted by the HMRC to provide a wide range of tax breaks to UK investors in entrepreneurial businesses including film and TV. The EIS and SEIS (see below) schemes are now the only UK tax efficient schemes to offer Capital Gains Tax Deferral. The scheme also offers income tax relief at 30%, capital gains free growth and, through Business Property Relief, relief from Inheritance Tax if the shares are held for more than two years.

These reliefs significantly mitigate the risk of investment:

  • Income Tax Relief – An individual can reduce their income tax liability by 30% of the amount invested in the EIS shares. The EIS qualifying investment must be held for no less than three years from the date of issue, or three years from commencement of trade. The minimum investment sum is £500 per Company and £500,000 per annum per investor.
  • Capital Gains Tax Relief – There is no capital gains tax charged on the gain in any sale of shares so long as the investor has held their shares for at least three years. In addition there exist arrangements to defer Capital Gains Tax liabilities due on gains resulting from other investments subject to qualifying periods. For more information contact us.
  • Inheritance Tax – Shares in the Company should qualify for 100% exemption from Inheritance Tax in the event of the death of the shareholder so long as the shares have been held for two years.

Loss Relief – If the investment does not succeed or the EIS shares are disposed of at a loss (after taking into account income tax relief), such loss can be set against the investor’s capital gains or taxable income in the year of disposal or the previous year. For higher rate tax payers this loss relief can add up to 31.5% of investor protection (total 61.5% protected investment).

Further information: www.hmrc.gov.uk/eis/

The Seed Enterprise Investment Scheme (SEIS)

This scheme was launched in 2012 by the HMRC for investments into start up businesses including film and TV projects.

  • Income Tax Relief – An individual can reduce their income tax liability by 50% of the amount invested in the SEIS shares.
  • Capital Gains Tax Relief – There is no capital gains tax charged on the gain in any sale of shares so long as the investor has held their shares for at least three years. In addition there exist arrangements to defer Capital Gains Tax liabilities due on gains resulting from other investments subject to qualifying periods. For more information contact us.
  • Capital Gains Tax reinvestment relief.
  • Income tax loss relief on disposal. For Higher Rate tax payers this loss relief can add up to 22.5% of investor protection (total 72.5% protected investment).
  • Inheritance Tax – Shares in the Company should qualify for 100% exemption from Inheritance Tax in the event of the death of the shareholder so long as the shares have been held for two years.

Further information: www.hmrc.gov.uk/seedeis/index.htm

British Film Institute approved Film Tax Relief

UK film production companies are able to take advantage of this government subsidy, subject to a number of investment criteria.

For films with a total core expenditure of £20 million or less, the film production company can claim payable cash rebate of up to 25% of UK qualifying film production expenditure.

A British Film Institute (BFI) UK ‘Cultural Test’ applies to the subsidy and a number of international and bilateral treaties exist in relation to co-productions in order to take advantage of similar subsidies in other countries.

For further information: www.hmrc.gov.uk/films/

For further information on investing in Gizmo Films’ projects contact info@gizmofilms.com

 

Gizmo Films Productions is a full and active member of the EIS Association, the trade body for the industry, lobbying for maximum transparency and effective compliance.

We strongly advise potential  investors to seek individual specialist advice from their tax and financial advisers. As with any financial investment, there is always an element of risk and it is very important that you do not invest what you cannot afford to lose. While it is not possible to guarantee the commercial success of any film project, we want the best for our investors and so we are very selective in the projects that we work on ensuring that certain elements are in place, such as distribution deal, insurance and a completion guarantee. Investing in unlisted media companies is only suitable for restricted, sophisticated or high net worth investors.

Gizmo Films Privacy Policy