As part of the phased rollout of the settlement opportunity HMRC has written to individuals who have taken part in film production partnership schemes.

Film production partnerships seek to claim relief for expenditure incurred on the production of a qualifying British film under s42 and 48 Finance Act (no.2) 1992.

HMRC has set out the following terms:

• Loss relief against other income will be allowed in an amount equivalent to the contribution to the partnership personally contributed by you as the cash contribution, less any element expended on unallowable fees. Unallowable fees are those spent on tax advice, or payments to Independent financial advisers or circular funding arrangements. We will tell you if we believe a disallowance for fees is needed.
• The balance of the loss claim will not be allowable.
• Loan interest will only be allowable to the extent that it represents the allowable expenditure paid out of the initial cash contribution.
• Any share of income attributable to the cash element of expenditure will be taxable in full.
• Any share of income attributable to the loan financed element will only be taxable in so far as it represents investment income over and above the return of the initial capital.

While not of general applicability to partnerships, within the specific terms of this settlement opportunity HMRC is prepared to settle with individual partners, irrespective of whether or not the partnership itself continues to disagree with HMRC's view.

HMRC has a dedicated webpage with details of opportunities available for specific schemes. HMRC is aiming to contact all those who are eligible for the offer by the end of January 2013.

Further details are available from HMRC