A TAX AVOIDANCE SCHEME worth £480m and involving nearly 1,000 members is to be challenged by HM Revenue & Customs in a tribunal.
Associates of Icebreaker Management Services invested in 62 music partnerships. In response to an investigation by The Times, HMRC said it believes the partnerships served solely as avoidance mechanisms.
Losses incurred by the partnership can be offset against an investor’s income over the previous three years. Investors can augment this tax relief by taking out offshore loans prepared by Icebreaker. As a result, an investment of £40,000 in the company and a loan of £160,000 from it, would generate about £77,520 in tax relief.
Members of pop group Take That are believed to be among Icebreaker’s investors, reports The Times. Gary Barlow, Howard Donald, Mark Owen and their manager, Jonathan Wild, invested about £26m in the schemes.
There is no suggestion that band-mates Jason Orange or Robbie Williams were involved.Barlow, Donald, Owen and Wild paid significant tax, their lawyers said.
“We have taken firm action to protect the Exchequer from unacceptable tax loss,” a spokesman for HMRC told The Times. “We do not accept that the Icebreaker tax avoidance schemes have the tax effects their promoters claim.”
Icebreaker denies its activities are designed to avoid tax.
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