http://dollars-vedioonline.blogspot.com/2016/02/harry-potter-and-bank-with-magically.html
RBS used Labour tax break to invest in movies in return for a tax relief
Bank, which nearly went bust, invested in Troy, Harry Potter and Batman
Cash was handed to producers who would use the cash to invest in films
RBS could write off the upfront cost of the movie against its own profits
It is better known for financial wizardry such as manipulating interest rates and foreign exchange markets.
But Royal Bank of Scotland has also made £1billion disappear from its tax bill by investing in a host of hit films, from Harry Potter to Charlie And The Chocolate Factory.
The taxpayer bailed out the bank to the tune of £45billion in 2008 when its losses spiralled under casino capitalist Fred Goodwin - nicknamed 'Fred the Shred' because of his ruthless approach to business.
The Government still owns around 70 per cent of the bank and can't sell the shares without making a huge loss.
Yesterday it emerged that the state-backed giant gained generous tax breaks by exploiting controversial financing deals and is still earning an income from them to this day.
Set up by the Labour government in 1998, these ‘sale and leaseback’ arrangements were established to boost the UK’s film industry.
But they were exploited by wealthy individuals, including footballers and pop stars, as well as blue-chip firms to legally avoid paying tax.
LABOUR'S MOVIE TAX BREAK THAT HELPED SAVE THE RICH BILLIONS
The Inside Track fund allowed wealthy individuals to put money into films - in return for a tax break.
Put simply the investor formed a partnership with the producers to finance the movie, which Labour said brought more films to the UK, but it also gave the rich major tax relief.
The terms of the arrangement allowed the investors to claim tax relief against virtually the total sum ploughed into the film by the partnership formed with a producer - not just the amount that they had personally put in.
The partnerships were normally arranged under a two-for-one basis, meaning that if a celebrity put in £100,000 it would be matched by £200,000 from a film's other backers - but the celebrity could claim tax relief on the full £300,000.
The rebate had to be paid back over 15 years, but by investing the cash wisely investors could beat the taxman.
The minimum sum invested was £50,000 and films did not have to qualify as British.
Such schemes have now been outlawed, but were legal at the time as long as the investors said they were genuinely using their cash to invest in films and not to avoid tax.
The incentives were finally scrapped in 2007. But between 2003 and 2006 RBS avoided or delayed paying around £1bn in corporation tax, according to an investigation by news agency Bloomberg.
The High Street giant still owns the rights to more than 20 films, with its impressive portfolio also including Troy and Batman Begins.
These schemes allowed film studios to spread their huge distribution costs, and were designed to encourage them to make movies in the UK.
RBS, or another investor, would typically buy a completed film from the studio. They would then receive a regular fixed income by leasing it back to the studio for distribution to cinemas, on DVD, on television or online.
These arrangements – which typically lasted between 15 and 21 years – would give the studio an immediate cash return on the film to invest in other productions.
Meanwhile RBS could write off the upfront cost of the film against its profits – slashing the amount of corporation tax due.
In theory the schemes simply deferred RBS’s tax bill because the ongoing lease payments from the film studio are taxable.
But the bank has not paid corporation tax since 2008.
Secretive companies were set up by RBS to complete these sale and leaseback deals. Patelex IV Productions is listed as the producer of Harry Potter And The Goblet of Fire – starring Daniel Radcliffe – which was released in 2005 by Warner Brothers.
RBS said ‘these leases were compliant with tax law’, adding: ‘We have worked with HMRC to make sure that all our tax obligations in regards to this portfolio have been met.’
THE BANK THAT FELL TO EARTH: THE RISE AND DRAMATIC FALL OF RBS
Before the 2008 financial crisis, Royal Bank of Scotland was one of the largest and most aggressive banks in the world.
The bank was founded in Edinburgh in 1727, but by the end of the 20th century it was a major player in the City of London too as the UK capital became the world's leading financial centre.
RBS sealed its place at the top table of British banking in 2000 when it bought NatWest, which dates back to 1650 and was considered one of the 'Big Four' retail banks in the UK.
Fred Goodwin, right, became chief executive of RBS the following year and pioneered a gung-ho expansion strategy with resources poured into its investment banking division.
One of the biggest deals came when RBS joined a consortium to buy Dutch bank ABN Amro for £49billion, which was later revealed as a major overvaluation.
With the advent of the 2007 credit crunch and subsequent global financial turmoil, RBS was exposed as being dangerously indebted and unable to meet its obligations.
The Labour Government felt it had no option but to step in, and in October 2008 it took a 57 per cent stake in the bank in return for £37billion of new capital.
As the bank's losses spiralled and it required even more bail-out money, the state share of the firm rose to 82 per cent.
Much of the blame for RBS's troubles was attributed to Goodwin, who was forced to resign and subsequently stripped of the knighthood he had received in 2004.
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