Stars Face Big Tax Bill As Plan Backfires
Wealthy investors including ManU Manager Alex Ferguson, former football manager Sven-Göran Eriksson and a host of sports stars and figures "could be liable for huge individual tax bills after an attempt to reduce their liabilities backfired," according to Andrew Bounds of the FINANCIAL TIMES. The 289 investors in Eclipse 35, a film partnership ruled to be an “aggressive” tax avoidance scheme by a tax tribunal in April, "could end up paying several times more than the total" of £117M ($182M) tax they sought to avoid. The investors put £50M ($78M) of their own money into the scheme, conceived by Future Capital Partners, and borrowed £790M ($1.2B) from Barclays Bank to buy the film distribution rights to two Disney films, "offsetting the interest charged against income tax." U.K. Revenue & Customs said that it was treating the “sub-licensing” payments "as income and liable for tax," meaning investors stand to receive tax bills far greater than the income tax they originally tried to avoid (FINANCIAL TIMES, 6/22).