British Chancellor of the Exchequer (finance minister) Gordon Brown delighted domestic and international film producers and financiers in March when his budget speech announced a three-year extension of the popular British sale-and-leaseback tax relief structure.

Said Brown, in his House of Commons speech on March 7 in London: ‘The film industry tax incentive we introduced in 1997, which is contributing to the unprecedented success now enjoyed by independent British films, will at a cost of £50 million next year be extended until 2005.’

The British Department for Culture, Music and Sport, which administers the sale-and-leaseback tax benefits, had envisioned the structure ending in July 2002.

The current tax breaks allow producers a 100% tax write-off for films with budgets of up to £15 million (us$22 million, Cdn$34 million) in year one if the film goes into profit for ‘qualifying British movies’ under section 48 of the Finance Act.

In a statement, u.k. culture secretary Chris Smith said that the budget ‘announcement that Section 48 reliefs for the film industry will be extended until 2005 is good news for the film industry. The Government’s long-term aim is to create a more sustainable and better capitalised film industry.’ Smith went on to note that ‘film tax reliefs have already had a significant impact, attracting hundreds of millions of pounds of investment and helping to produce some winning films. This extension will enable a firm financial base to be built for the future.’