HMRC has published details of the settlement offer that drops HMRC's claim in respect of approximately £1.6bn of ‘dry tax’ which HMRC said was due from around 700 Eclipse members as a result of their participation in the Eclipse scheme, believed to be one of the largest such settlements in UK tax history.
‘Dry tax’ is tax payable without any corresponding income or profit and is an absolute cost for the taxpayer. As part of the settlement offer, any remaining tax reliefs must be repaid together with late-payment interest, which compensates HMRC for any period in which reliefs were wrongly held by taxpayers.
Commenting on HMRC's announcement, Derek Hill, Head of Tax and Structuring at Fieldfisher said: ‘HMRC has been clear that this settlement only applies to Eclipse. However, Fieldfisher's view is that our analysis could be applied to many if not all tax structured film finance schemes that remain the subject of disputes with HMRC, affecting potentially thousands of other individuals.’ George Gillham, Co-Head of Tax Disputes at Fieldfisher, added: ‘As we have shown, the villain of the piece was the Eclipse film finance model itself. The structure did not work, and could never have worked, as implemented.’
HMRC has published details of the settlement offer that drops HMRC's claim in respect of approximately £1.6bn of ‘dry tax’ which HMRC said was due from around 700 Eclipse members as a result of their participation in the Eclipse scheme, believed to be one of the largest such settlements in UK tax history.
‘Dry tax’ is tax payable without any corresponding income or profit and is an absolute cost for the taxpayer. As part of the settlement offer, any remaining tax reliefs must be repaid together with late-payment interest, which compensates HMRC for any period in which reliefs were wrongly held by taxpayers.
Commenting on HMRC's announcement, Derek Hill, Head of Tax and Structuring at Fieldfisher said: ‘HMRC has been clear that this settlement only applies to Eclipse. However, Fieldfisher's view is that our analysis could be applied to many if not all tax structured film finance schemes that remain the subject of disputes with HMRC, affecting potentially thousands of other individuals.’ George Gillham, Co-Head of Tax Disputes at Fieldfisher, added: ‘As we have shown, the villain of the piece was the Eclipse film finance model itself. The structure did not work, and could never have worked, as implemented.’
