Tackling avoidance - manipulation of film tax reliefs

The Government will bring forward legislation, effective from 20 December 2005, to counter an avoidance scheme which seeks to side-step the current anti-avoidance rules preventing individuals exiting from film partnerships free of tax. The scheme attempts to exploit the film tax relief currently provided by Section 42 of Finance (no. 2) Act 1992 and Section 48 of Finance (no. 2) Act 1997 which is due to be replaced on 1 April 2006. The replacement relief will be targeted exclusively on film production companies and will not be available to investment partnerships and other financial intermediaries.