The "hardline decision" by U.K. tax authority HMRC to "issue huge tax demands" to hundreds of wealthy investors, including former ManU Manager Alex Ferguson, in the Eclipse film partnerships "marks the culmination of a four-year campaign against such avoidance schemes," according to Alexi Mostrous of the LONDON TIMES. In '12, a tax tribunal "fired the opening salvo when it struck down Eclipse 35," which attracted investors including Ferguson and former footballer Nolberto Solano. Members of Eclipse 35 put in a total of £50M cash, with Barclays providing an additional £790M in loans. Using this pot, the partnership "bought worldwide distribution rights to two Disney films, Enchanted and Underdog," for £503M. Eclipse 35 "simultaneously re-licensed those rights" back to Disney for £1.022B. The income would "flow back over 20 years and would be used to repay the loan." The "trick was to allow its members to claim tax relief on the large interest payments they made on the loan," worth £117M ($144M). HMRC objected, arguing that the deal with Disney was “designed with the ultimate object of giving the members interest payments ... for which they can claim tax relief." A succession of courts "have agreed." But the "fallout has not stopped there." Whereas investors in most failed film schemes "merely have to repay the tax, the highly leveraged way in which the Eclipse deals were structured has left its members exposed to potential tax liabilities far in excess of their original loss." Investors' groups said that someone who put £200,000 ($246,980) into an Eclipse scheme "is now expecting a demand to pay back tax" of between £2M ($2.5M) and £4M ($5M) within 90 days (LONDON TIMES, 11/19). In London, Alexander Robertson reported former England Manager Sven Goran Eriksson is "among the 780 investors spread across 39 partnerships." HMRC is "expected to dish out demands to those involved in the next two months, with recipients given 90 days to pay." Other big names to invest in the schemes are former England footballer Glenn Hoddle and Peter Davis, who served as chair of Sainsbury's (DAILY MAIL, 11/19).
