Harry Potter star Rupert Grint faces a substantial tax bill after losing his case against British tax authorities, Rupert Grint is owing around $2.3 million to His Majesty’s Revenue and Customs (HMRC), for misclassifying his residual payments from the film series as a capital asset rather than income.
HMRC Began Investigating Rupert Grint’s 2012 Tax Return in 2019
HMRC began looking into Grint’s 2012 tax return in 2019, alleging that the actor had misclassified $5.7 million in income from Harry Potter DVD sales, TV syndication, streaming rights, and other sources to pay a lower tax rate.
Grint’s lawyers appealed when the probe began, but a judge ruled in favor of HMRC this week and ordered the actor to pay the taxes he owed.
In 2011, Grunt, who played the role of Ron Weasley in the iconic film series, established the company Clay 10 Limited and sold his residual rights to it as capital. A filing reveals that the company had about $34 million in equity in March 2023.
Rupert Grint Utilized the Financial Loophole Previously Used by The Beatles
HMRC invoked the “Beatles clause” throughout the case, drawing a parallel to the tax strategy employed by The Beatles in the 1960s, whereby they formed a company and sold the rights to their music to it to pay capital gains tax instead of income tax, per Entertainment Weekly.
U.K. Judge Harriet Morgan said in the ruling that Grint’s residual money “derived substantially the whole of its value from the activities of Mr. Grint” and “is taxable as income.”
Morgan also supported the actor’s claims that he entrusted most of his financial matters to his father, Nigel, and accountants and was unaware of the full extent of the situation.
Grint “placed his faith in his father and accountants to deal with his financial affairs,” Morgan said.
The British star is estimated to have earned around $30 million for starring in all eight Harry Potter movies from 2001 to 2011.
As per the reports of the Associated Press, Grint previously lost a tax dispute with the UK government in 2019, resulting in the loss of $1.3 million tax refund.
For more such stories, check out Hollywood News.
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