Following a lengthy legal battle, the highest court in the land, The Supreme Court, has ruled in favour of HM Revenue and Customs, refusing the Eclipse Film Partners (No 35) LLP, permission to appeal last year’s Court of Appeal decision, protecting an estimated £635 million in tax.
Eclipse claimed to trade in film rights but was in reality a tax avoidance scheme, seeking to create substantial interest relief claims for investors.
David Gauke, Financial Secretary to the Treasury, said:
“This is another important victory for HMRC and shows that its compliance teams are effective in tracking down tax avoiders and retrieving money owed to the Exchequer.”
This decision upholds the earlier Court of Appeal decision, concluding that there is no merit in this case being heard any further. As a result the findings of the Court of Appeal remain in place.
Investors were not eligible for interest relief and profits from the partnerships remain taxable. This puts the investors in a significantly worse position than if they had never invested in the scheme.