Imagine No.1 LLP, Imagine No.2 LLP, Imagine No.3 LLP (collectively “Imagine”), Timeless Releasing LLP (“Timeless”) and Timeless Releasing 2005 LLP (“Timeless 2005″) are a collection of partnerships formed between 2004 and 2006 that were promoted as being engaged in the trade of exploiting completed feature films commissioned by or licensed from a US Major Studio (“the Studio”).
The generic term for this type of structure is a “GAAP Partnership”. These were an evolution of the government backed Film schemes that were used to promote investment in UK qualifying films by offering attractive up-front tax benefits through sale and leaseback arrangements.
Partnership revenue was contingent on the successful exploitation of the film which in most instances was minimal. Although the popularity of the film played its role, the lack of income was mainly attributable to the income sharing arrangements between the studio and the partnership. This meant that the sole return was derived by the initial tax benefit. HMRC soon took an interest in GAAP partnerships and implemented measures to put a halt to their promotion and they have subsequently been classified as “Tax Avoidance Schemes”.
We have a strong track record in advising and assisting a large number of clients in a variety of matters, including the negotiation of settlements with HMRC on preferential terms, and achievable time to pay arrangements.