Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Coutts warned clients on film scheme HMRC tax challenge

Coutts warned clients on film scheme HMRC tax challenge

Coutts has warned its clients about a possible HMRC  Revenue & Customs tax probe into film investment schemes (FIS).   

According to the Sunday Times, RBS-owned Coutts was among a host of private banks which sold FIS to clients. Others included HSBC Private Bank and UBS.   

The controversy surrounding these schemes has intensified over the last few weeks, with the likes of David Beckham and Michael Caine among those using FIS to reduce their tax bill.  

The Sunday Times claims to have seen a letter Coutts sent out to customers in December 2004, recommending a FIS as the ‘most effective in mitigating tax paid at 40%.’ The letter also revealed that Coutts was paid 1% in commission for arranging the scheme with Ingenious.  

In response to the revelation Coutts insisted it had done nothing wrong. A spokesperson told the paper: ‘Coutts historically provided tax advice to some clients in respect to a number of genuine film financing arrangements.  

‘The relevant risks were prominently highlighted and where appropriate it was made clear that there was a risk to a HMRC challenge.'   

It added: ‘Although a number of these arrangements are subject to ongoing HMRC inquiries, the ultimate outcome of these is still unknown.’  

Meanwhile HSBC said it stopped selling FIS in 2009, adding ‘the risks were highlighted to potential investors such as partnerships.'  

The revelation comes amid growing anger among investors who feel they were mis-sold FIS.  

The vehicles are the subject of a £7 billion crackdown on tax avoidance. Last week HMRC revealed several hundred film partnerships were among 1,200 potential tax avoidance structures it had identified.

Earlier this month Ingenious Media issued a warning to some 1,300 investors in its FIS, which included Beckham and the likes of Bob Geldof and Gary Lineker.  

Ingenious Media told its investors they could be forced to cough up a combined £520 million to meet the tax bill, while stressing the schemes were not set up for the specific purposes of avoiding tax.

Ingenious Media, which has described HMRC’s attack on FIS as ‘draconian’ in the past, said at the time: ‘We have done everything we can to lobby for changes to the accelerated payment proposals as the Bill has progressed through Parliament, but without success.’  

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Biotech Growth: we will ride out this storm

Biotech Growth: we will ride out this storm

Geoffrey Hsu of Biotech Growth Trust says the sell-off in biotechnology stocks represents a buying opportunity for long-term investors.

Play Sector Spotlight: Kleinwort Benson's Choukeir on UK equities

Sector Spotlight: Kleinwort Benson's Choukeir on UK equities

In our first Sector Spotlight of the year we explore UK equities on the back of the extreme market turbulence in 2016.

Play Picton: the UK property hotspots for rental income

Picton: the UK property hotspots for rental income

Picton Property Income CEO Michael Morris reveals how he is planning to ride the ‘ripple effect’ as UK economic growth spills out from the capital across the country.

Your Business: Cover Star Club

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

Profile: PortfolioMetrix is on a mission to kill 'Frankenstein' systems

In a buyers’ market for off-the-peg discretionary management, self-funded start-ups begin at an inherent disadvantage

Wealth Manager on Twitter