Film Investments

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Has anyone come across companies that seek investment for up and coming films? I had an email today from one and I wondered how legit they may be and if anyone has any experience of them? I have included one link below that came with the email. Any help and advice would be appreciated.

Thanks

http://www.blockbusterfilms.net/os404/

Comments

  • droopsnoot
    droopsnoot Posts: 1,764 Forumite
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    Yes, I used to get letters and stuff from this kind of place. How legit is anyone that sends cold-call emails seeking investments from total strangers? If you search back far enough, I think it's a commonly-raised topic, Carnaby Films was one name I recall being discussed before.


    Obviously no-one can say for sure, but probability is that it's not going to bring you anything good.
  • le_loup
    le_loup Posts: 4,047 Forumite
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    Might be fun but expect to lose any money you put in.
  • steampowered
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    This was very common a few years ago. Lots of people invested in loss-making film investment schemes purely for tax reasons. The schemes claimed to be able to get higher rate taxpayers (for example) £120 off their income tax bill for each £100 invested.

    This was all challenged successfully by HMRC. Many of the schemes have since entered insolvency and the individuals responsible are being sued by investors. See http://www.bbc.co.uk/news/business-36986483.

    Having a look at the website, they still seem to be advertising tax relief as the major reason for investing in the scheme. I'm very surprised to see that these schemes are still being advertised given the scandal earlier this year.

    I would run a country mile. It sounds like there is a good chance you'd lose every penny invested.
  • sorcerer
    sorcerer Posts: 878 Forumite
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    I remember one so called film company that managed to get £400,000 from the general public, all spent on parties, holidays and cars for the owner. Since a major block buster costs 100million dollars + , what is £400,000 going to get you anyway?
  • JohnRo
    JohnRo Posts: 2,887 Forumite
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    It is possible to have a relatively cheap film become a huge mainstream success but depending how much you're planning to invest, there's probably more chance of winning the lottery and it'll likely cost a lot less.

    I personally put Film investment in the same category as Wine, Diamond, Storage pod, Airport parking, Carbon credit investment et al.

    Good luck, you'll certainly need it.
    'We don't need to be smarter than the rest; we need to be more disciplined than the rest.' - WB
  • Malthusian
    Malthusian Posts: 10,976 Forumite
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    sorcerer wrote: »
    Since a major block buster costs 100million dollars + , what is £400,000 going to get you anyway?

    Usually a cheap clone of Lock Stock & Two Smoking Barrels starring some Nathan Barley types putting on awful Cockney accents, from what I know of these schemes.

    This particular scheme appears to be advertising EIS / SEIS relief. I haven't looked into it at all, but EIS / SEIS is a relatively common form of tax relief, completely different from the artificial structures that Ingenious et al used. It is a scheme the government has set up to promote investment in small businesses like these.

    However all such schemes carry a high risk of 100% capital loss. Even if you get 50% tax relief, that still means you've lost 50% which is a lot for most people (and the taxman loses the other 50%). And the exemption from tax on income and capital gains is irrelevant if the investment never produces any income or gains.

    Cold calling is never a good sign.
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