Investing in film for tax relief (section 481)

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rupert7

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Does anyone have any tips on how to research a film and it's producers properly before investing in the section 481 film relief scheme?(Asides from google!)

I understand the risks are very very small as nobody has lost their money since the scheme started but would like to reduce it further by choosing wisely.

A film currently looking for investment is a new film called a Pursuit.

It is a 90 minute feature film written and directed by Paul Mercier starring Brendan Gleeson. It is based on the historical love story of Diarmuid & Gráinne as told in Toraíocht Diarmuid & Gráinne but set in a modern day times. The Pursuit of Diarmuid and Gráinne concerns a love triangle between the great warrior Fionn, the beautiful princess Gráinne and her paramour Diarmuid.

Anyone got any opinions on this?
 
I don't know the project you're proposing becoming involved with, but have had a number of investments in films.

There was no reward in the investments I made previously, didn't even receive a free ticket to go and see the film. I'm not sure who is promoting the stated investment, but I suggest you ensure to find out what is in the deal for them, and that your money doesn't go askew.
 
Do you understand that you are only "investing" in the film in a very narrow sense.

I am not familiar with the film you name.

The "investment" is usually structured so that you get a small to fair return on your investment. Most of the tax break goes to the producer. You don't normally participate in any upside.

However you are exposed to the downside. If the project fails you will loose your money.

Usually none of this has anything to do with the success or failure of the film commercially.

I don't think it is correct to say none of these has ever failed. Divine Rapture with Marllon Brando certainly failed. I believe it had section 481 money.

If you do want to go ahead, be very clear what your return on investment will be. This is a predetermined figure and not subject to the performance of the project, except that if the project fails you will not get what you are promised.

As for researching the film and its producers this is not really relevant. The producer is usually a one off company that has no existence outside the production, or maybe just a small part of the production.

Only 2 things differentiate these section 481s. The rate of return, and to a small extent the promoter. By that I mean the people selling the investment. Any sensible bank, accountancy or law firm will try to avoid being involved with any obviously bad project
 
I invested in loads of them before and put lots of clients in them too for the tax breaks. Everyone always got their money back.

It doesn't matter a hoot whether the film is a commercial success, all you want is the tax break on your money.

The question to ask is whether the film/ tv series is commissioned or not. You do not want to be in a situation where the film is made but they have no one to show it. That is how you can lose money.

Always invest in a film that already has a buyer. Once they have that, your chances of losing out are drastically reduced (the buyer has to go bust).



Steven
www.bluewaterfp.ie
 
SBarrett said:
I invested in loads of them before and put lots of clients in them too for the tax breaks. Everyone always got their money back.

It doesn't matter a hoot whether the film is a commercial success, all you want is the tax break on your money.

The question to ask is whether the film/ tv series is commissioned or not. You do not want to be in a situation where the film is made but they have no one to show it. That is how you can lose money.

Always invest in a film that already has a buyer. Once they have that, your chances of losing out are drastically reduced (the buyer has to go bust).



Steven
www.bluewaterfp.ie
Click to expand...

Commercially speaking you don't get the tax break, the film producer does. You get some small return on your investment, subsidised by the tax break.

Certainly you want a film that already has a buyer (can a project get 481 finance without one?). However if the buyer is unhappy with the final product delivered by the producer, the producer will struggle to get paid. The buyer may be unhappy if the film is delivered late for example.

Most section 481s do pay out, but it is not risk free.

Where are you getting the cash to make the investment. Will the promoter lend it to you. If not I would be worried. After all if the investment is not sufficient collateral for a loan what does that tell you. Well they know more about the project than you do.
 
Hello,

I have been doing these for several years now and thankfully I have had 100% perfect experience to date.

Suggest you ensure that:

- they are introduced from a reputable source (there are a few established accountancy & tax consulting firms doing these regularly)

- the production is pre-sold, be it a movie or tv series

- preferably have the option of seeing bank lending available to fund the investment, simply because it gives a little extra comfort that a Bank has also agreed to lend, based on the strength of the production & it's backers.

As an aside, wasn't there a problem with the movie Space Truckers some years ago ?
 
MrEarl said:
- they are introduced from a reputable source (there are a few established accountancy & tax consulting firms doing these regularly)
Click to expand...

+1. If there is going to be issues, the issues are likely to come from an admin / compliance perspective. Ensure there are reputable experienced firms involved.
 
How dod you go about investing in one of these and availing of the tax breaks?
 
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