“Harry Potter” star Grint has to pay millions in back taxes

“Harry Potter” star Rupert Grint has to pay 1.8 million pounds (almost 2.2 million euros) in back taxes. This was the ruling by a court in London in a dispute between the British actor and the responsible tax authority HMRC, as reported by the British news agency PA. The 36-year-old played Harry Potter’s best friend Ron Weasley in the film series.

Grint had already been ordered to pay the sum in 2019 after HMRC opened an investigation into his tax return for the 2011/12 tax year (April 5). The actor had received £4.5 million in “consideration for rights, records and goodwill” from a company that managed his business affairs.

In his opinion, this income was subject to capital gains tax. Grint probably used the same trick that the Beatles used, explains the British tax lawyer: The British pop group had founded a company to which it sold its music rights. First of all, the company benefited from the income from their music rights. They were able to withdraw the capital from the company themselves – and only paid capital gains tax instead of income tax. The top income tax rate in Great Britain relevant to the Beatles at the time was 95 percent.

Today the top British tax rate on capital is just under 45 percent. The top rate of capital tax is 24 percent. Both values ​​are significantly lower today than in the time of the Beatles, but the gap still remains large.

Today, however, the so-called “Beatles Clause” prevents the state from losing revenue through this trick. Anyone who converts their income into capital still has to pay income tax. This also applies to actor Grint. The tax authority also argued that income tax would have been due on the sum of his income. Judge Harriet Morgan now agreed with this, as the PA agency also reported.

Financial experts criticize the British tax system. “Grint was 23 years old at the time. I doubt he understood what was going on,” . The “tax system that creates artificial categories of things and then taxes them differently” is to blame. “Of course people will react to it.” He concludes his criticism that it is a shame that the capital gains tax is not reformed in the budget. Rupert Grint will also be annoyed: he now has to pay back his tax debt – plus interest.