Brief history of Section 35 tax relief

INTRODUCED in the 1987 Budget, and subsequently amended several times, Section 35 relief allows investors in films made in Ireland to deduct the cost of their investment from their taxable income. A number of changes were introduced in the 1996 Budget aimed at "improving the targeting of the relief and to make it more cost efficient from the point of view of the Exchequer".

The most significant change was the reduction in the amount of the total cost of film that can be funded through money raised under Section 35. This was left at 60 per cent for films with budgets of less than £4 million but was reduced to 50 per cent for films with budgets of between £4 million and £15 million.

The maximum amount of money that could be raised under Section 35 by films with budgets of more than £15 million was capped at £7.5 million.

The effect of these changes was to try and ensure that Section 35 money was channelled towards smaller budget films, which would be likely to have a larger Irish input.

The proportion of an individual's investment that could be claimed against tax was reduced from 100 per cent to 80 per cent of the investment, subject to a maximum of £25,000 for private investors and £2 million for corporate investors.