foundation films can arrange for investment opportunities in film production through a number of options which limit downside risk and enhance the potential upside returns, including investment under the Enterprise Investment Scheme (EIS) and Self Invested Personal Pensions (SIPPs). foundation films manages EIS/SIPP qualifying production company Syndicate Films which is on target to be one of the most commercially successful film EIS companies to date.


New Investment Opportunities
Benchmark Films, a new EIS/ SIPP investment opportunity with advance HM Revenue & Customs approval, has just been launched. Investment professionals can register to receive information on the opportunity - please call 020 3039 3459 or contact us by email.


Tax Relief Summary
Enterprise Investment Scheme (EIS) - offering qualifying investors tax relief on amounts invested up to £500,000 per tax year. Unlike other film based tax schemes each individual EIS company has advance approval from HM Revenue & Customs. The EIS company must operate within the EIS rules for at least three years, which fits into the time frame needed to produce and market a film and collect film revenues.

20% initial tax relief on amounts invested. All or part of the amount invested can be carried back and applied against income in the previous tax year. An investment of £100,000 effectively costs £80,000 after the initial relief is claimed or set off against other tax liabilities

capital gains tax (CGT) deferral relief worth 18% to 40% of the investment on gains arising in the three years prior to or year following investment, so previous CGT can be reclaimed or deferred. CGT from the preceding three years that was taxed at 24% to 40% can be reclaimed through the EIS and will be repayable at the prevailing CGT rate on exit, currently a 6% to 22% saving in tax with the new 18% CGT rate. Combined with the initial 20% tax relief this reduces the cost of investment into an EIS by up to 42%, so a £100,000 investment costs just £58,000

100% inheritance tax relief after holding the EIS shares for two years

loss relief worth up to 50% of the amount invested net of the initial tax relief taken based on the new higher tax rate, worth a maximum of 40% of investments. In a worst case scenario the basic EIS mitigates risk by combining the initial tax relief and the loss relief to limit the downside to 40% of the amount invested, or 18% where a 40% CGT liability has been deferred

tax free realisation of profits which significantly enhances the return.

If an EIS investment breaks even after three years, then allowing for the initial 20% tax relief the net return is almost 8% per annum. Due to this return being tax free, it is the equivalent of a gross return of over 15% per annum at the new higher tax rate. If the return on investment is 30% after corporation tax, then the EIS relief results in an effective gross return of over 35% per annum.

Link to HMR&C EIS page

Self Invested Personal Pensions (SIPPs) - following the changes to pensions introduced in April 2006, unquoted shares qualify as a permitted investment for acquisition through a SIPP. By acquiring production company shares through a SIPP the net cost of the investment to an applicant paying tax at the higher rate is effectively 60 pence for each £1 invested. Additionally any return paid as either dividends or a realisation of capital will be returned to the SIPP without deduction of tax. foundation films has linked up with a leading SIPP provider able to facilitate investment where no SIPP is held or an investor's SIPP limits investment options.



The information provided on this site does not constitute investment or taxation advice, and prospective investors should consult an authorised person specialising in advising on investments and tax who is able to take account of an individual's personal circumstances.