ASK & DISCUSS INDEX

8 years, 9 months ago - Dan Selakovich

It sounds to me like they are looking for a tax shelter. For any help in this matter, you'd have to say what country they are from. Though, in most countries this loophole has been closed.

8 years, 9 months ago - Gary Braun

The film will be done in the Uk.
The investors come from The Uk.

8 years, 9 months ago - Gary Braun

The film will be done in the Uk.
The investors come from The Uk.

8 years, 9 months ago - Paddy Robinson-Griffin

There's an effective 20% tax credit available through DCMS, and you can also use EIS/SEIS as partial tax support options, although you'd need it to be structured sensibly, and it can suit slate development more than individual features thanks to the built-in timescales.

How much are we talking? Roughly? And it's for a feature, right?

8 years, 9 months ago - Paddy Robinson-Griffin

BTW all investors invest for a profit. Patrons may give money away to art for art's sake, but all investors expect to make a profit.

8 years, 9 months ago - Gary Braun

In order to respond to you,Paddy,I have to better understand the tax system.
These people are no patrons but business people,they are looking for having ,minimum ,their invested money returned
To them with Tax incentives.They do not care if it is feature or documentary films.
Will try to find an accountant who is familiar with that.

8 years, 9 months ago - Dan Selakovich

I know nothing about the U.K. system, but this seems odd to me. They want a profit or break even, AND have a tax cut on top of that. That's a sweet deal. Is that the way it works there, Paddy? (But breaking even is extremely rare on films).

In the U.S., the best you can get is writing off your investment loses on future taxes up to 18 years--which I think is insane. 5 years, sure. But nearly 20?

8 years, 9 months ago - Paddy Robinson-Griffin

The tax breaks in the UK are about increasing the attraction of the investment by effectively offsetting a portion of risk, not by guaranteeing a profit. Technically they could reduce exposure to add low as 40p/£ for small investments, but that's still 40p of risk. Aside from outright tax fraud you can't get guaranteed upside with zero risk. I can't recommend tax fraud, it tends to catch up with people.

Gary, I know a little about this if you IMDb me or reference my other posts here. I can certainly connect you with a chartered accountant who's done this for many other films and who plays straight. I feel I ought to flag to you that there are a lot of fantasists, bullies, liars, bloggers and just straight crooks in the world of movie finance. Please be very cautious about any investment schemes you see online, for instance. Having seen the truly beyond shitty scams and thefts from some "reputable" people, be VERY conservative at every step. The more exotic the scheme the higher the odds you'll regret introducing anyone. I've seen investors stolen by sales agents, I've seen huge international fake escrow fraud, I've seen very dubious tax claims, I know people who've lost homes (that was non-film, but very similar setup), I've seen people use loan shark finance, i know of a producer who used to bare knuckle box just for completion finance. You'll hear a lot of encouraging words from some very qualified and charming people whose names only appear in glowing terms online. Film finance is often VERY ugly. It's an open secret and it preys on newcomers. I've even seen old dogs who should know better get rolled over by crooks and fantasists for millions. Just saying seeing the money in the bank is the first time to fully believe it.

The reason I ask about ballparks is that it'll affect what kind of vehicles may best work for your guys, but there are no guaranteed upsides, just reducers of risk exposure. PM if you prefer, or not if you're not keen, I've no dog in the race!

8 years, 9 months ago - Paddy Robinson-Griffin

Dan, we have a very generous scheme in the UK, effectively you get back ~20% of qualifying spend, and pretty much everything is a qualifying spend (unlike, say, bits of Canada where the relied if against labour only, and capped). That's why our studios are booked solid all summer by US productions, they get free money back. There are constraints of course, but it's a hugely generous scheme.

8 years, 9 months ago - Dan Selakovich

That is amazingly generous. Good lord, I would think the thing to do in Britain is open a studio lot. If I win the lottery, can you help me out with that, Paddy? Thanks for the education. I had no idea.

8 years, 9 months ago - Gary Braun

I very much appreciate ,Paddy,your warnings about negative people in this industry.
However without funding there is no film.
Have asked for advice a year ago and wanted to invest as semi retired person in making films and your cry for wolves
Frightened me so much that I was paralyzed and blocked me.I regret it.

8 years, 9 months ago - Paddy Robinson-Griffin

Hi Gary, oh goodness I'm sorry if it feels I've cried wolf over film investment. As I say, it doesn't matter to me what you choose to do as long as you choose to do it consciously. This is why I'm honest, but also happy to summarise the legitimate investor schemes, and raise a flag against the less legitimate/more exotic as people lose (and occasionally make) fortunes. Big money attracts wrong'uns, and many of them are the most charming, affable people you'll meet. As I recall (sorry, I may be misremembering so correct me by all means) you were looking to invest a modest amount but that it was money you weren't particularly comfortable about losing? The problem with film is that there's a lot of costs, a lot of risk, and a lot of losses.

If you're still keen, then rather than putting it all into one film or project, you can spread the risk with a slate, or at least join a fund that will seek to minimise your losses (first money out, etc) as for retail investors it's very easy to lose the lot even with the best of intentions from all parties. Maybe something like Ingenious Film Fund? They will help to mitigate risks, but it's still only good for money you could afford to lose. I knew a guy who'd place £15k bets on the horses who saw films as too much of a gamble.

Anyway, sorry if I've frustrated your creative ambitions and will no longer interfere in your financial choices as at least your choices can be informed ones.

Dan, yep, a lottery win and go head to head with Pinewood group ;-). The incentives are really attractive, far better than almost any other industry, yet people still whine! Bring your next production to the UK, or at least cost it out with the weak pound you'll be laughing!

8 years, 9 months ago - Gary Braun

Paddy,When I started my interest in Film making,it was not for the intention of investing but as a way of practising
Art."Movie making".I went to City Lit college,Raindance,bought a Blackmagic camera with all possible accesories,
Learnt editing,lightning,sound and had the ambition to produce films,by myself or in partnership with others.
Not as an investment.I did not succeed to make partnership,because I was afraid of unethnical partners...as You quoted.
Am still interested in getting involved with partners,provided I am involved,not only with money.
If someone is interested will be happy to discuss this matter.
About tax incentives:am looking for an accountant who could discuss this matter.

8 years, 9 months ago - Paddy Robinson-Griffin

Hi Gary, I hope you find what/who you're seeking, and wish you the best with your endeavours.

8 years, 9 months ago - Gary Braun

My initial question was about finding an accountant in London who could explain me what incentives are there in the UK?
This in order talk to investors,who I know,to invest in Uk Film making.

8 years, 9 months ago - Colin Webb

Hi Gary, I've been following your post with interest and, in some respects, you've had all the answers you can expect - within the UK tax system relating to film (and assuming your investment is not in the large millions, in which case there are other ways of looking at this using tax across national boundaries) there is 1) the producers credit relating to 25% of 80% of the budget that is spent in the UK, as a maximum, 2) there is either a seed enterprise investment scheme, capped at £150k, or the Enterprise investment scheme, capped at £15m for your consideration, these are both shareholder benefits and come with some strings and 3) there are standard loss/accrual/depreciation mechanisms open to investors in any company. How you can use these schemes will depend very much on your own personal circumstances, and this is what should be discussed with your accountant, which is what I think Paddy was saying. If you have large Capital Gains liabilities, these can be offset by the EIS scheme and any profits made within the scheme are not subject to tax until you leave the scheme (I believe) at the end of the three year EIS period. The value of the shares under these schemes is not liable to inheritance tax (very useful for some people) and if at the end of the scheme you translate your shares into ordinary shares in the film company then of course you can depreciate them at 25%pa as usual, and in the UK Corporation tax on profits is relatively low at 20%, set to possibly become lower if we are to believe the government so taking profits out of the company will benefit higher rate tax payers significantly.

These are the basics as I see them. I would stress that while I have sketched the outline of what you can work with, the specifics are very much down to your personal circumstances and something you should discuss with your own accountant who knows how your personal landscape lies. As with all investment you need to either take a hard-nosed look at what the returns are likely to be (pretty rubbish for most films) or decide that you want to invest for the fun of it, the journey and the thrill of making something. For the record, I've never tried to sell a film on the former basis; you might get lucky and have a star property, you might do averagely and make your money back, or it might tank, so unless your personal circs determine that the tax landscape will work for you, invest because you believe in the project.

8 years, 9 months ago - Gary Braun

Thank you,Colin,for your extensive answer about that subject.It helps me a lot.
However no investor is talking to me with larger sums and max.sums are around 100k£.
Every one knows that there are no expected profits in film industry and break even is
paradise.
Have different producer friends in Hollywood who even went bankrupt.
Interesting that till now I did not receive a name for a reasonable priced accountant in London..

8 years, 9 months ago - Colin Webb

Hi Gary, there are a number of ways to address the multiple investor issue, the simplest of which is that you simply have a shareholder agreement that allows for more than pone investor. In this way, for example, three investors with £50k each could be part of a film project and still benefit from the £150k cap that SEIS provides. Again, this is very common practice. If there is a higher budget or a bit more to invest, the EIS scheme allows for multiple investors as a requirement, so there is no conflict here either.

There are plenty of genre films being made at the £50k level and going straight to disc - by genre I mean broad categories, such as horror, slasher. zombie, hooligan, sci-fi, romance, gangster, etc - and these tend to be simple stories that can be shot quickly by small crew and cast and with limited locations. Although by no means guaranteed, these are much more likely to make a profit and often provide a return as the genres tend to have very loyal followings. I have three projects of my own at this level and we're currently talking to investors. I also have a project at the sub-one million level, a more complex story needing more resources, and a more mainstream feature that's a couple of million. The accepted wisdom is that the best return internationally is likely to come from a film with 'names' in it that costs less than $2m to make and where you have a distribution deal already - but that's another story.

Regarding accountants, I'd be happy to introduce you to mine if that woujld help, they are not film specialists but at this level of investment they don't need to be, it's largely a question of looking at shareholder agreements, tax breaks and how this fits in with the rest of an investors portfolio - or if they don't have one, then how their investment will impact their income and tax return on an individual basis. My accountant is based in the home counties but work all over the south east and are very reasonable.

If you'd like to talk more, or privately, feel free to email me colin@catchfilm.com

8 years, 9 months ago - Ian Mansfield

Hi there, firstly my name is Ian Mansfield and I do SEIS/EIS investor documents which are specific to feature length film/documentary production, I do this as a consultant. I compile a dossier from literature/artwork you hand to me until the document contains the necessary information needed to pass the scrutiny of HMRC. If HMRC approves your document you receive Advanced Assurance (AA). You need AA before any investor can receive tax relief on a SEIS or EIS share. At present I do consultancy work for a freelance accountant who works for a certain company already mentioned in this thread.

For further information on how we can best help you please email ian@projectionpictures.com, if you wish to arrange a meet with me and the accountant (we meet in central London every week). Naturally we do charge a fee for what we do; once you engage us to undertake the work. We also have our own feature film projects which require investment.

8 years, 9 months ago - Gary Braun

Thank you so much for your good will and advice about taxes.
At this stage,am going to search for mini projects and to better understand the film industry.
After that will go into projects where I would involve tax incentives.This since my investors trust
My judgement.

8 years, 9 months ago - Lee 'Wozy' Warren

Stephen Bristow at Saffery Champness.