InvictaCapital is to quit the UK film business, says managing director Niall Bamford.
TheLondon-based company, one of the powerhouses behind the sale andleaseback-driven production boom in the UK in recent years, is estimated tohave raised over $2.2bn (£1.25bn) for the film industry in the last five years.
Recentprojects the company has backed include Cannes' opening film, The Da VinciCode.
"We'vebuilt up quite a good reputation for ourselves (in the film business) and it isregrettable but the tax rules have changed and we don't see room for us andwe're moving into selling other types of products to investors," Bamfordcommented.
Invicta'sexit from the film industry was hastened by the abolition of Section 48 andSection 42 tax relief at the end of March.
It isnow looking for other investment opportunities for the high net worthindividuals who make up its client base.
Itrecently launched what Bamford described as an "aviation structure." It is alsoexploring tax relief for "environmental type" investments.
Othertax-based film financiers are looking at alternative strategies for raisingfunds for film production, but none of these appealed to Invicta.
"Youcould do an EIS scheme but compared to the amount of money that has been raisedthrough Section 48 and Section 42, the amount you can raise is very small. Iwould hope the industry isn't relying on EIS," said Bamford.
"Asfor GAAP (generally accepted accountancy principles) schemes, we've never wanted to look at those and think they're taxaggressive. The Inland Revenue has always said that it is their intention tobring such aggressive schemes to an end."
"Wenever looked for the film industry to do anything for us. We were utilising atax break that existed. You can't look at a tax break and believe you can run along term business round a tax break," he said.
"Producers were very happy to have the likes ofus, but a lot of the advisory groups within the industry seemed to repeat theGovernment view that 'we don't want middlemen' It has been very dishearteningfor companies like our own to hear that view re-iterated from various sectorswithin the industry. If we're obviously not wanted in the industry, there isnot a lot we can do about it."