Descriptive
Notes And Contents List
Tax
shelters have traditionally been the preserve
of rich families and corporations wanting to
turn today's highly taxed income into tomorrow's
lowly-taxed capital gains.
Film-making,
like forest plantation and high-tech company
development, has the key tax shelter characteristic
of requiring investment over a period of time,
with returns deferred until the film is released.
There may also be a long tail of 'rights' income
from world-wide distribution, video and dvd
sales etc. Classically, films were too risky
to be used for tax shelters, but the introduction
of completion guarantees and of intermediate
media holding companies to spread risk has now
overcome that problem.
Forests
(expensive to set-up and slow-growing) are also
a perfect tax shelter, more especially because
they are environmentally friendly. Many countries
give beneficial tax treatment to forests, which
makes an already tax-efficient investment even
more interesting. These reports give a detailed
analysis of the tax regime for forestry and
its economic basis in six high-tax countries
and one offshore jurisdiction.
The 'dotcom'
boom and bust has turned venture capital from
an arcane corner of the lunatic fringe of investment
into a key sector of the corporate capital markets.
But it is when incentive tax breaks are added
that venture capital investment becomes more
than just one investment route among others.
Any
investment in a developing company is likely
to have some of the characteristics of a tax
shelter, ie that the cost of borrowed capital
(to invest) is a deductible expense in most
countries providing the structure is right,
and that returns (and payment of the tax on
them) are deferred until an investment is realised.
The astronomical returns offered on flotation
of many high-tech stocks added gilt to the gingerbread
of venture capital investment, and it has recovered
strongly from the losses of 2000 and 2001.
In
this series, we take a passing glance at the
general tax regime for investment in a country,
but we concentrate mainly on the tax-privileged
venture capital investment regimes in each case.
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United Kingdom