Ingenious Media fund allegedly exploits tax loophole
British industryites, including helmer Guy Ritchie, Peter Gabriel and presenter Anne Robinson, have been caught up in a probe into an alleged tax-avoidance scheme involving finance company Ingenious Media.
They invested money, reportedly between £160,000 and £1.4 million ($251,107 and $2.2 million) into a fund that allegedly exploited a legal loophole giving undue tax benefits to those backing the film industry, according to a report in the U.K.’s Mail on Sunday.
Some investors have already received tax demands for tens of thousands of pounds, per the newspaper report.
Under a policy set up by British Prime Minister Gordon Brown when he was finance minister, investors could slash their tax bills if they backed the film industry.
However, the U.K.’s Inland Revenue believes that a fund run by Ingenious Media was aimed at avoiding tax and not bolstering the film industry, so was against the rules. Such schemes have since been outlawed.
Founded by chairman Patrick McKenna, Ingenious Media has raised about $7.8 billion to put into films over the past decade, including “Avatar.”
McKenna has told investors that he believes the Inland Revenue’s interpretation of the issue is wrong.