Eclipse loses Supreme Court appeal, private residence and lettings relief denied in Kothari, EIS relief disclosure notices overturned, UK intermediaries swept into Panama Paper leaks and EU plans for country-by-country reporting (CBCR)
Eclipse film partnership scheme loses Supreme Court appeal over £117m relief
The Supreme Court has ruled in favour of HMRC in a long-running legal battle over the use of film partnerships as tax avoidance schemes, and has rejected an appeal by the Eclipse 35 partnership in a decision which will leave investors, including many high profile celebrities, facing large tax bills.
Eclipse 35 had previously sought to argue it was a trading, rather than an investment, venture. However, in 2012, HMRC denied Eclipse members’ claims for £117m in tax relief, which saw the beginning of a series of legal challenges over the decision.
HMRC argued that Eclipse 35 did not carry on a trade, as required to qualify for the tax reliefs, but ‘merely organised a sophisticated financial model involving licensing and distribution rights’ in relation to two Disney films.
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