Investors have the chance to finance movie sound tracks with the help of the Seed Enterprise Investment Scheme (SEIS).
Under SEIS investors can claim 50% relief of their investment against their income tax bill, up to £100,000, and now one firm is hoping to hit the right note with their latest offering.
Atlantic Screen Group (ASG) is a music publisher which has just been given permission by HM Revenue and Customs to launch a SEIS to help fund film scores.
ASG has a track record in the field, with their work used in the BBC’s Dancing on the Edge and the films The Host and Great Expectations.
The firm is no stranger to raising funds this way – having previously used enterprise investment schemes (EIS) three times – the latest of which was to raise £4 million to help create 40 film scores.
SEIS tax breaks
SEIS, an investment wrapper with generous tax breaks, is growing in popularity with more than 1,000 applications to HM Revenue and Customs since the launch last summer.
Apart from the ability to offset an investment against income tax, investors also benefit from capital gains tax and inheritance tax breaks.
In addition, SEIS company losses can be set off against tax bills too.
ASG’s creative director Tim Hollier said his firm generally sees an investment repaid with royalties within three years.
He added: “Our SEIS and EIS funds aren’t like film investment funds as we do not release our money until the production is finished and has a sales and income forecast which means we are more protective.”
Venture capital
ASG also says that investors get a say in the individual films that the fund will make an investment in and that the music publishing industry has grown every year for 50 years.
SEIS investments aren’t the only popular way of raising finance with news that Venture Capital Trusts (VCT) raised £402.5 million in the last financial year, according to the Association of Investment Companies (AIC).
Director general of the AIC, Ian Sayers, who said: “This is the highest level in seven years for funds raised and reflects the sector’s strong demand from investors.
“It’s also a vote of confidence in the VCT structure and the role it plays in providing finance for smaller UK companies.”
