HMRC settlement opportunity for Eclipse Film Partnership members

The Eclipse Film Partners (numbers 1 to 40) Limited Liability Partnerships (Eclipse LLPs) were complex financial arrangements and a form of tax avoidance.  Through their “investment”, taxpayers aimed to generate large interest payments on bank borrowings, presented as contributions to the capital of the Eclipse Film Partnership, so they could buy film rights.  HMRC did not accept the borrowings for the “investment” were real.

Eclipse Film Partnership members claimed relief for the interest payments against their income to avoid tax.  Each Eclipse Film Partnership entered into substantively identical arrangements.   This settlement opportunity is only for individuals who are current or former members of any Eclipse Film Partnership and for tax issues arising from Eclipse.

How to accept the settlement opportunity

HMRC state that a taxpayer must:

  • give up your Eclipse interest relief claims and pay the tax avoided
  • pay the interest on the tax paid late
  • give up any legal actions which are part of other Eclipse related litigation involving HMRC

Payment arrangements for any Settlement of the tax and interest can be tailored to a taxpayer’s circumstances.

What if taxpayer’s do not accept the settlement opportunity?

HMRC state that they will:

  • continue to disallow the interest relief claims
  • pursue Income Tax on your share of the income through the Tribunal and defend Eclipse related litigation.
What should taxpayers do?

Consult with a specialist in order to consider what options may be available, if any.

HMRC’s announcement of this settlement opportunity will  draw a line under the proceedings and bring certainty for taxpayers.

HMRC continues to challenge all forms of tax avoidance giving little, if any, certainty in their tax affairs.  Anyone wanting to explore their options in exiting any form of tax avoidance can contact me to discuss what their Settlement options may be.

 

Leave a Reply

%d bloggers like this: