Wealthy City investors sue finance firm Ingenious over film investments
Wealthy City investors are suing finance firm Ingenious along with banks Coutts and HSBC over the billion-pound film production schemes that Revenue & Customs has labelled tax avoidance vehicles.
More than 100 investors, including Ken Costa, former chairman of investment bank Lazard, and Christian Hess of investment bank Investec, have issued a writ in the High Court against Ingenious and more than 50 associated companies.
Among these are a group of financial intermediaries, including Royal Bank of Scotland-owned Coutts, which specialises in providing banking services for the very wealthy, HSBC Private Bank and Swiss investment bank UBS.
The Revenue has said Ingenious’s film schemes, which saw a swathe of the very wealthy put in money to back films and defer paying tax as a result, were primarily aimed at tax avoidance rather than film production. Ingenious, founded by accountant Patrick McKenna, who ran Andrew Lloyd Webber’s Really Useful Group, disputes this and the two sides faced each other in a tax tribunal this year over the issue, though no decision has been reached.
Ingenious raised billions of pounds from 1,300 investors to put into the schemes but has faced a backlash from its clients, many of whom now claim they were wrongly advised to enter the schemes without being made aware of the risks involved.
Among those who invested money but who are not involved in this legal action are: footballers David Beckham, Wayne Rooney, Steven Gerrard and Gary Lineker; cricketers Michael Vaughan and Marcus Trescothick; and television journalists Kate Adie and Jeremy Paxman.
Some investors faced unexpected tax bills for millions of pounds – footballer Danny Murphy faces a £2.5million bill – after the Revenue sent out accelerated notices demanding payment last year. Those receiving such notices must pay up and can only claim the money back if the scheme is found not to be for tax avoidance.
The total sum that could be claimed by investors who say they have been wrongly advised to enter Ingenious’s schemes and similar ones is estimated at £12billion. HSBC, UBS and Coutts all declined to comment.
Ingenious said: ‘The film partnerships run by Ingenious Media have already generated over £1billion in taxable income for the UK Treasury. They helped to bring movies including Avatar, Vera Drake and Hotel Rwanda to the screen and are clearly run for profit. These claims are entirely without merit and we will vigorously defend any actions brought against us’.
