Anyone know about film partnership income?

Anyone know about film partnership income?

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PurpleMoonlight

Original Poster:

22,362 posts

156 months

Saturday 22nd October 2016
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I am trying to understand the basis of taxation of a film partnership income, and more specifically if the income can be used for pension contributions upon which tax relief can be obtained.

I believe this is one of the HMRC approved arrangements and tax relief was granted on the initial funding.

I am told that profits are currently being distributed on an annual basis and this is taxed as declared self employed income, furthermore class 4 NI is paid on it.

My clients accountant doesn't know the answer.

It seems to me that if the income is deemed standard self employed income, just as say a plumber, then it can be used for pension contributions. But if it is somehow deemed by HMRC as investment income, even though NI is payable (the result of a court case a couple of years ago I am told) then it couldn't be used for pension contributions.

williaa68

1,527 posts

165 months

Monday 24th October 2016
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Seems right to me. The whole thrust of the Ingenious and other litigation is that they claimed the schemes were carrying on a trade and HMRC said they weren't, they were articifical arrangements designed to achieve a tax benefit. If the scheme you are talking about is not one under investigation by HMRC then it would, i think, make sense that it was ordinary and hence pensionable income. Your friend might need a new accountant though!

Cheib

23,112 posts

174 months

Tuesday 25th October 2016
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PurpleMoonlight said:
It seems to me that if the income is deemed standard self employed income, just as say a plumber, then it can be used for pension contributions. But if it is somehow deemed by HMRC as investment income, even though NI is payable (the result of a court case a couple of years ago I am told) then it couldn't be used for pension contributions.
If the person has another job then I don't think they can claim this.

The basis of a lot of the film schemes was something called "Sideways Loss Relief"...which as I understand it meant that whilst you have a 9 to 5 job you could claim the losses from said Film Scheme against your personal income. To qualify for SLR you had to prove you did something like ten hours a week work for said Film partnership. Where the film schemes fell down was that people applied for SLR and didn't read the small print...so when HMRC said "Okay prove you've 10 a minimum of 10 hours a week" they suddenly had a significant problem. Never mind how the schemes were actually structured i.e. to make a loss from day one.

I don't think you can claim self employed income from a film partnership if you have a full time job elsewhere. If it's your only job/income then you probably can ?

Thankfully I didn't get involved in film deals!

Edited by Cheib on Wednesday 26th October 12:52