Barclays and Bank of Ireland sued over film finance tax evasion scheme
Barclays and Bank of Ireland are being sued as part of a £180m lawsuit brought by investors in a film finance scheme the pair were involved in.
Investors in the Eclipse film financing scheme lost out after tax authorities ruled the vehicle, which purported to invest in Disney films, was actually a tax avoidance scheme.
HSBC is already being sued for £150m in connection with the same scheme which offered investors a deferral of tax in exchange for investing in exploitation rights to Disney blockbusters including Pirates of the Caribbean two and three.
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David Greene, senior partner of law firm Edwin Coe, said: “Letters before action have been sent to Barclays and Bank of Ireland spelling out the case against them. They have a period to respond but in the absence of substantive response proceedings will be commenced.”
Nick Wood of Newport Tax Management, which is representing over 400 of the investors, said: “These schemes appeared to be legitimate but were often little more than get rich quick schemes for the bankers and promoters.”
Rob Rutter of CFS Capital, a litigation funder which is working with Newport, said: “These products were sold privately on a huge scale and were part-funded by several major banks. In many cases, people have ended up owing far more than their original investment, and as a result their lives have been ruined. What we have seen so far is the tip of the iceberg."
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In its annual report HSBC said it was possible that “additional actions or investigations will be initiated” against the bank in connection to its involvement in promoting the schemes.
It said it was not possible to predict the possible aggregate impact of the litigation, but said it “could be significant”.
Bank of Ireland and Barclays declined to comment.