Sport stars and celebrities are among 500 investors suing Ingenious Media Holdings Plc according to court documents, Bloomberg has reported.
The investors, who also include a number of traders and managers from Goldman Sachs, Lloyds Banking Group, HSBC Holdings, Credit Suisse Group AG and other banks, say they were misled about investments in the film industry that were later branded tax avoidance by the U.K. government.
According to Miles Dean, managing partner of Milestone International Tax, explained to eprivateclient that the investments were “designed to create losses (an investment usually produces a return) against which income could be offset” and “investors or IFAs would not “fully understand the scheme they were participating in, other than believing it would reduce their tax bill.”
Mr Dean added that the “most common reason for 'investment' schemes failing foul of the tax courts is that the investment element is secondary and the tax benefits primary.”
"The problem is that footballers and popstars tend to have very limited knowledge of tax law, not least very complex tax driven schemes, and their agents are no better. It is likely that many of the IFA’s selling the schemes wouldn’t fully understand the complexities of the arrangements at hand."
The case is Balarkas v. Ingenious Media Holdings Plc, High Court of Justice Chancery Division, Case No HC-2017-000490.
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