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Eclipse film scheme claims

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Edwin Coe LLP has filed a claim against HSBC, on behalf 371 investors, for the losses caused by its role in the conception, development, and marketing of a series of Disney film financing schemes known as the Eclipse Partnerships. The Claimants allege they were induced to invest on the false promise that Eclipse represented a genuine opportunity to invest in blockbuster Disney films.

David Greene, Senior Partner at Edwin Coe said: ‘It is now clear Eclipse was a passive pass through model via which the rights to Disney’s films circled back to the studio. Eclipse was a sham investment opportunity ... At no point did Eclipse actually exploit, or otherwise trade in, any meaningful film rights of any value from Disney.’

The claimant group is seeking some £1.3bn in loss and damages.

In Eclipse Film Partners No 35 LLP v HMRC [2015] STC 1429, the LLP contended that it had carried on the trade of acquiring and exploiting film rights and that its members could claim tax relief for interest incurred on loans taken out to invest in the LLP. Dismissing the claim, the Court of Appeal held that the taxpayer had not been carrying on a trade, had not paid for the production of the films and had not made a significant contribution towards their exploitation (see ‘The Court of Appeal judgment in Eclipse 35’ (Judy Harrison & Chris Bates), Tax Journal, 11 March 2015).

Issue: 1493
Categories: News