Film Investment Services
EIS Film Investment is the most sensible way to invest in UK Film.
SEIS/EIS applications, Process and Management
EIS HMRC approved Tax releif schemes are essential to attracting private equity investment into your film. Leverage Itasca Film’s experience and success to make easy for you to enter the game.
For small UK independent filmmakers, raising investment to make your film is a struggle. Of course not all films are made as commercial ventures and it is true that with the advent of low cost digital wizardry it is cheaper to make lower budget feature films. However they are rarely free and so some form of investment is required, be it from Family and friends or seasoned sophisticated investors. Please note this page is aimed at filmmakers who wish to make commercially successful films. Shorts and Art House films have different dynamics and are not addressed on this page.
Film Funding Sources
UK Film Council/British Film Institute, National and Regional Screen Agencies, Local Councils, Charities, Production Schemes & Competitions, Completion Funding and even Crowdfunding are all valid sources of funding. Each needs researching and preparation work before submitting your applications. There is a lot of competition for these grants, so be prepared to be disappointed……often. They may be lottery funded but you have more chance of winning the Lottery than being awarded a grant from one of these sources.
The Main Sources of Film Funding
In practice 30% of your budget will come from private finance / high net worth individuals, 25% Govt Grants & Tax Relief, 23% Pre-sales, a total of 88%. So for practical purposes let’s focus on these three sources.
UK Govt Grants & Tax Relief (25%)
The government is a far more reliable source of funding and you can get 25% of your production costs with Film Tax Relief, which you can cash flow via a bank to access the cash up front. There are a whole host of supporting tax relief benefits that can be offered to private finance / high net worth individuals via SEIS/EIS.
This is tricky because it largely depends on you having a relationship with a Sales agent who in turn has relationships with content aggregators and distributors. Sending your trailer to broadcasters or other production companies is not advised unless you want to see your idea become someone else’s blockbuster.
You will need to have at least a trailer and concept and if TV you’ll need a completed episode, preferably the very best you can muster. For a feature film you can build a trailer from stock footage and mood reels, the idea is to create a video impact of your concept.
You need a great story backed with big name cast member(s) or director as these are the things that determine sales. If you can tickle their saliva glands you might be able to pre-sell but usually they want the finished article before coughing up any cash.
Private Finance / High Net Worth individuals (30%)
Recent headlines accusing celebrities of Tax Avoidance and films being regarded as very high risk v high reward, make this a very tough market. Investors must be wealthy enough to afford a punt and wealthy enough to be paying CGT and IHT to take full advantage of all the benefits that come with SEIS/EIS.
You can get to these types of investors through Accountants, IFAs, Wealth Managers, Investment Clubs, Direct Marketing. But be warned, few accountants will recommend risking client money in films. You’re going to need a slick offer document, detailing the offer and the benefits, backed by lawyers and accountants. Few accountants and IFAs seem to understand SEIS and even fewer Investors. It is considered in the same context as Lotto scratch cards. So although it is undoubtedly the most generous Tax relief offering from the UK Govt, few want to buy into it.
The Good News – EIS Film Investment
It is a pretty simple process to apply and be awarded SEIS/EIS. EIS Film Investment is setup by HM Govt and approved by HMRC and it applies to films/TV creations for EIS Film Investment.
You need a dedicated Company (SPV) to act as the Film Production Company, FPC, then apply to HMRC for SEIS/EIS Advanced Assurance. There maybe some questions back from HMRC regarding the EIS Film Investment but once they are satisfied you are genuine, they will award SEIS/EIS AA to your FPC. Investors in that vehicle will then be entitled to the considerable SEIS/EIS benefits, income tax relief immediately and tax free profits after three years which is about the time to fund make and sell a film.
You then need an Information Memorandum detailing the offer, benefits, product/concept of the EIS Film Investment together with the Investor waiver forms, all backed by lawyers and accountants.
Itasca Films can help with every stage, and while we charge, it is not the £50,000 charged by London Media Lawyers and we know films and understand what you need. We reduce the costs by doing all of the leg work ourselves, using templates, checklists and our experience, obtaining professional sign off when complete.
Accurate, Informative and Entertaining IMs
We at Itasca Films Feel as we’re in the entertainment industry, therefore the IM should be Accurate, Informative and Entertaining. We produce colour magazine style IMs on high quality paper. Although not cheap, it shows investors we are serious and have put some work into preparing their documentation.
The Three Year Journey
Although SEIS/EIS Income Tax relief is immediate, investors must wait three years before being able to sell their shares back to the FPC, after which any profits will be tax free.
However, it is crucial not to break any HMRC rules and do things in the right order. For example, don’t issue shares until cleared funds have been received by the investor into the FPC’s account. If the FPC breaks any of HMRC rules regarding SEIS/EIS companies, at any time within the three years, HMRC can withdraw and worse, claw back, any Tax Relief. So you need to keep your noses clean for three years or face having an very awkward discussion with your shareholders as to why they have lost their Tax Relief.
SEIS/EIS companies are not allowed to be listed on any financial exchanges so the usual exit is, after three years, for the FPC to offer to by back the shares, hopefully at a profit, form the shareholders.
Again Itasca Films has a process to help you manage this ongoing requirement for EIS Film Investment.