Film Financing - A Tax-Efficient Option
Rather than lending the banks £500,000, why not do what the banks do with the money they borrow from you, and cut them out? In times when borrowing is difficult, those who make money available stand to be very popular and can command excellent rates.
This is now the case in the film industry, where the combination of withdrawal of almost all forms of tax relief from film funding, coupled with the credit crunch, and the withdrawal of almost all the primary lenders to independent film producers has lead to excellent opportunities to step into the gap.
How? By providing cash-flow to the film production process, you can cut out the banks and get the full rate for yourself. An offshore roll-up fund is a mechanism that allows you to do this in a highly tax-efficient environment, particularly for higher rate taxpayers.
Here is an example: Some £1,000,000 is on deposit in the bank at 2 per cent, equal to £12,000 per annum after tax at 40 per cent, or £10,000 after tax at 50 per cent. (The UK now has a top income tax rate of 50 per cent on annual incomes of £150,000 a year or more).
