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Sven and Fergie tax plan defeated in court

by Daniel Grote on Dec 23, 2013 at 12:00

Sven and Fergie tax plan defeated in court

A film scheme backed by former England and Manchester United football managers Sven-Goran Eriksson and Alex Ferguson has been defeated in the Upper Tax Tribunal.

Eclipse 35 was a limited liability partnership promoted by Future Capital Partners which claimed to enable its partners to obtain tax relief on their general income. HM Revenue & Customs (HMRC) had won a case against the scheme in the First Tier Tribunal, claiming the tax reliefs did not work. The scheme appealed that decision, but has now been handed a further defeat in the Upper Tribunal.

A number of celebrities invested in the scheme alongside Ferguson and Eriksson.

HMRC said 31 related partnerships would be affected by the judgment, representing around £600 million in tax.

Exchequer secretary David Gauke said: 'The government wants to support and encourage genuine business investment through the tax system, which is why we have tax reliefs.

'However, we will not stand for abuse of those reliefs and HMRC will come down hard on anyone who tries. In this case, anyone who used the scheme to try to avoid tax will have to pay tax on the income from the scheme, meaning they are worse off than if they'd never used it. The message is clear - if it looks too good to be true, it probably is.'

10 comments so far. Why not have your say?

Robert Cubitt

Dec 23, 2013 at 12:12

Good.

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Mr Witt

Dec 23, 2013 at 12:14

OMG Poor Fergie & Sven, the telly might have to go back.

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simon kane-gallagher

Dec 23, 2013 at 12:22

what no fergie time?

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Man of Kent

Dec 23, 2013 at 13:00

Perhaps they'll make a film of it.....

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Paulb via mobile

Dec 23, 2013 at 13:19

Makes a change for Sven to be shafted !

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Eugen via mobile

Dec 23, 2013 at 13:24

It would be a good film 'man of Kent'.

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Pat Riot

Dec 23, 2013 at 14:59

Excellent News why not double it to teach the greedy so and so's a lesson?

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Glen McKeown

Dec 24, 2013 at 10:59

There's an old saying - if you don't have anything sensible to say, shut up. Most of the previous comments seem to have come from 7 year olds.

If anyone is shown a sound way to save tax there is a high probability it will be used, and there is no ethical problem with that in my opinion.

Those who used this scheme would, in most cases, have no idea of the technical set up, so would implicitly rely on the technical and ethical competence of their advisers.

The fact that it doesn't work is a refection on the creators and the advisers rather than the clients. Unless there are factors about which we have not been informed I would recommend that the clients sue for compensation. If someone sells you a product that is not fit for purpose you would expect compensation. That appears to have happened here, and in other cases.

There would be a great incentive for future designers of such schemes to ensure the scheme works if they felt they would be sued for selling faulty products.

I have no issue with the process of reducing tax legitimately, but I believe the industry has been flying too many kites, on the basis they can take their fees and the clients can take the risk. I cannot see that as being particularly ethical.

Even if the providers and advisors are proved to have behaved in a reasonable manner, the threat of legal action is likely to raise standards far higher than any regulator.

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Robert Cubitt

Dec 24, 2013 at 11:11

There is another saying - Everyone is entitled to their own opinion.

Welcome to the internet old man, where we are given a comment box, to comment in.

I also have no problem with tax mitigation, but for men of such calibre, I doubt they have fully believed the legitimacy of such a loop hole.

So back to my perfectly reasonable opinion - Good.

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Walter White

Dec 24, 2013 at 11:57

Well said Robert, too many folk on NMA seem to misunderstand that an online forum is about opinion, banter & candid comments - as well as serious points of view - get back to your paper & quill old man mckeown!

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