Irish football stars face tax bills over film finance deals

Keane and O’Neill invested in films at heart of £1.6bn HMRC case

Ireland manager Martin O’Neill is one of the investors affected by the HMRC case. Photograph: INPHO/Ryan Byrne

Ireland manager Martin O’Neill is one of the investors affected by the HMRC case. Photograph: INPHO/Ryan Byrne

 

Several Irish soccer stars are among hundreds of celebrities in Britain facing the spectre of large tax bills, after UK tax authorities claimed victory in a landmark £1.6 billion legal case over investments in disputed film finance deals.

Current Ireland internationals Robbie Keane and John O’Shea, the Ireland team’s manager Martin O’Neill, and former stars Clinton Morrison, Denis Irwin and David O’Leary are among the investors affected by the case.

The long-running battle concerns the tax treatment of investments made since 2003 in film finance partnerships assembled by UK firm, Ingenious Media.

The 66 films financed under the schemes include box-office hits Avatar, Die Hard 4, Life of Pi and Shaun of the Dead.

The crux of the case lies in the tax treatment of accounting losses claimed by the schemes.

The celebrities would invest into the partnerships in one-off payments. The cash would then be forwarded to Hollywood or independent producers to finance the films.

Very often, large losses on these investments would be recognised in the accounts of the partnerships.

These losses would then be allocated to the celebrity investors and used to offset tax owed on their other income, such as, for example, the footballers’ wages.

The UK’s HM Revenue and Customs (HMRC) disputed the schemes, and accused the partnerships of using “artificial losses” as tax shelters.

The partnerships disputed this and the case was heard before a UK tax tribunal, which delivered a complex 342-page judgment last Friday.

It agreed, in part, with the HMRC.

Ingenious has also claimed a partial victory, after the tribunal accepted some of its minor arguments. It said it is considering an appeal.

Other stars who invested include Steven Gerrard and Wayne Rooney.

The Football Association of Ireland declined to comment when asked about the affairs of Mr O’Neill and the current Ireland players.

Mr Morrison and Mr Irwin did not respond to requests for comment, while Mr O’Leary could not be reached.