If like me you always had an interest in film but never quite made the cut in acting class, there is still an opportunity for you to get involved. Section 481 TCA 1997 film relief allows individuals to get tax relief for an investment in a qualifying film or television series. This investment relies on the successful completion of the film/television project.
Successful shows which have availed of this scheme include Penny Dreadful, Mattie, Tashi & The Widower to name but a few.
Film Relief is available, generally for high income individuals, who invest up to a maximum of €50,000. Individual investors can invest amounts exceeding €50,000, but only €50,000 relief is allowed in one tax year. Any amounts exceeding €50,000 can be carried forward to the proceeding tax years. Therefore it is generally recommended investing a maximum of €50,000 in any one year.
To get the tax benefit from film relief an investor would typically raise the €50,000 investment slot by part equity / part loan agreement. Based on the credit application being approved, the investor issues a cheque for €17,500 and the remaining €32,500 is financed by a loan, which is applied for through the film production company. The individual then subscribes to shares of €50,000 and Revenue will issue a Film 3 certificate to confirm the investors’ investment.
The investor then makes a claim to the Revenue Commissioners and receives tax relief of 41%, assuming they have enough income at the higher rate. Based on a €50,000 investment, the investor should receive a refund of €20,500 from Revenue.
PAYE investors should see this refund on their payslips before the end of the year in which they invest. Self-assessed investors will have to wait until they file their tax return before seeing their return.
The overall return for an investor will be €3,000 if they invest €50,000 in the scheme.
If you are interested in investing in film relief, please contact us on 021-4641400 or email firstname.lastname@example.org.
Blog by Laura Simpson, Trainee Accountant, Quintas