The new rules order European film-makers from France, Italy, Denmark and Iceland – countries with a strong film-making traditions – to spend 40% of their budgets in the UK, when involved in co-productions, in order for these films to qualify for tax relief, The Guardian reported.
The previous threshold had been set at 30%.
Estelle Morris, the arts minister, said too many productions were taking advantage of the tax regime by shooting films which had never been shown in the UK.
The new threshold follows the media storm after the Treasury decided in February to close a tax loophole, used by some film finance partnerships for raising money to fund big-screen productions.
Tax reliefs still remain for small UK film productions.
In his March Budget speech the chancellor announced that relief would be paid directly to filmmakers, for films under £15m at a rate of 20%.
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