Bankers sue UBS after tax avoidance plan goes wrong

Three senior NM Rothschild executives who thought they were onto a winner when they signed up for a "highly aggressive tax avoidance mechanism" are suing UBS bank in London after the plans backfired and ended up costing them money.

The men are demanding £1.25m from UBS and another company called ProAct over the advice, which was given in 2004.

They were advised to invest in an enterprise called Film Development Partnership IV, which dealt with film financing, distribution and development. According to the lawsuit the plan was to claim the fund's losses against their income.

However, the UK tax department rejected the fund's tax return and the bankers were unable to claim any of the losses on their personal returns.

An HMRC spokesman said: "The loopholes which allowed the tax relief to be abused with no benefit to the film industry have been closed. If we find evidence of abuse we will take steps to put things right."

UBS, which avoided criminal charges in the US last year despite admitting it had helped around 17,000 Americans evade taxes, said it would fight the claim.

Read a full report at Bloomberg. ·