A court case against Rupert Grint, who played Ron Weasley in theHarry Pottermovies, just cost him over $2 million of what he made for his famous role. Grint played a significant role in thecast ofHarry Potter, portraying Harry’s best friend throughout all eight movies in the franchise. Because of this, he received a significant payout for his role, alongside residuals for TV airings and DVD sales. This money is separate from what he was paid up-front, and a commonality in the movie industry for many starring actors.
However, according to Tax Policy Associates Ltd. FounderDan Neidle,a court case has ruled Grint owes £1.7 million (about $2.16 million), plus interest, after losing a tax tribunal caseover hisHarry Potterresiduals. The tax expert goes into the history of UK taxation, starting by explaining how capital gains taxes are capped at 24%, while income tax is capped at 48%.
Neidle explains how, in the 1960’s, when income tax was capped at 95%, the Beatles set up a company and sold their music rights to it, attempting to pay capital gains tax instead, which was 30% at the time.This was stopped by what was later judged “the Beatles clause,“which explains that trying to turn income into capital gains will cause it to be taxed as income regardless:
This rule was later applied to Grint, who, at 23,established a company to turn his £4.5 million of residuals from income to capital gains. At the time, capital gains tax capped at 50%, meaning he’d have to pay £2.2 million on his residuals. Instead, due to additional relief that allowed him to cut his taxes by an additional 10%, his taxes were cut to £450,000. However, in a recent tax tribunal, the judge invoked the Beatles clause, meaning he now owes nearly £2 million.
Neidle ends his explanation saying thatGrint’s father had been in charge of his finances at the time, meaning it isn’t necessarily the actor’s fault. However, that doesn’t negate the lump sum and interest he’s going to owe now that the judge has ruled on his case.
What Neidle’s Analysis Says About Grint’s Harry Potter Residuals Case
This Isn’t Grint’s First Time Losing A Taxation Court Case
This is not the first time the actor has been in court over taxation,having lost a 2019 case over a £1 million tax refund. Based on Neidle’s analysis,Grint’sHarry Potterdayswould have been the opportune time to pay his taxes. While £1.7 million is still £500,000 less on paper than what he was expected to pay, Neidle mentions potentially big interest as well. Since this amount isn’t clarified, it could be another staggering loss depending on how the numbers get crunched.
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Even though the actor’s father was in charge of his finances at the time,it unfortunately falls to him to manage his money and pay his overdue income tax. While the situation isn’t ideal, he doesn’t have much of a choice, given the way his finances were handled while starring in theHarry Pottermovies. It likely means having to ensure he has that amount of money, while also preparing for the interest Neidle mentioned would be involved.
Grint has made an estimated £24 million for his role as Ron inHarry Potter.
Our Take On The Money Grint Owes For Harry Potter Royalties
A Lesson To Be Learned On Income & Capital Gains Taxes
Grint’s story is a cautionary tale about claiming income as capital gains in the UK, emphasizing the importance of reporting taxes honestly. Otherwise, there will be fees and legal consequences, much like those incurred by theHarry Potterstar. While the money he’s earned over the years means it will be possible for him to pay it back, it’s still a situation that could have been avoided under different circumstances.
Source:Dan Neidle/Twitter
Harry Potter
Harry Potter is a multimedia franchise about an orphaned boy who enrolls at Hogwarts School of Wizardry, where he learns the truth about himself, his family, and the terrible evil that haunts the magical world. Adapted from the novels, Harry Potter is an eight-episode film saga that follows the journey of Harry Potter and his friends, Hermoine Granger and Ron Weasley, as they navigate the tricky world of growing up, school life, and magic. Starting from year one and moving to their seventh year, the films chronicle the students' time at Hogwarts while unfurling a sinister plot that centers around the unsuspecting Harry. With the return of the dark wizard, Voldemort, the students and professors at Hogwarts will fight to carry on as the world around them may change forever. Harry Potter has expanded beyond the world of its films and novels with several video games, a spin-off film series titled Fantastic Beasts, and even attractions at Universal Studios.
