Film investment, known as Section 481 (of the Taxes Consolidation Act 1997) is the only relief that most middleto-high income PAYE and self-employed taxpayers can utilise in addition to pension planning.

And with the fundraising for the second series of The Tudors commencing shortly (circa 18m required), as well as fundraising for a second series of Aifric now underway, it's a good time to check out how it works.

Under S481 an individual taxpayer may subscribe for up to 31,750 shares in a qualifying film company in respect of the tax year in which the investment is made.

Around 80% of the amount subscribed is available as a deduction from the investor's total income thereby eliminating the tax liability on this amount.

If married, each spouse is entitled to invest up to 31,750, provided that each has sufficient income in his or her own right.

Provided the series is delivered to and accepted in accordance with the pre agreed arrangements, the qualifying film production will be entitled to a payment for making the series exactly equal to the interest and capitalised interest of the investors.

The cash required to pay the qualifying film production company is held in a special purpose account from the beginning of the investment period to ensure that there is no risk of the qualifying film production company not being paid after the delivery and acceptance of the series.

Section 481 is one of the methods used to support the Irish film and television industry along with the Irish Film Board and Broadcasting Commission of Ireland.

It's not a get-rich-quick scheme, contrary to the belief held by some politicians who view it as a tax avoidance mechanism.

It is important that the incoming government continue state aid for the film industry through continuing Section 481 and also improving it by removing the 80% restriction and increasing the individual limit from 31,750 to 50,000. Without an improved and continued Section 481, it will be difficult for Irish producers to create and finance their own projects and for the industry to attract foreign producers to locate projects in Ireland.

Anglo Irish Bank PLC is raising funding for the second series of The Tudors. For a prospectus contact Joanna Campling on 01-616 2174.

HC Financial Services Group Limited is fundraising for the second series of Aifric produced by the Emmy Award -winning Telegael Teoranta in Spiddal, Co Galway for TG4. For further information contact Martina Forde on 091-788 000.

Paul Mee is a tax partner with Mazars, Salthill, Galway, 091-570 100