Payments made to non-resident theatre backers of plays and
musicals (also known as "angels") are in return for money put up by
them in the finance of a production. If the show is successful
their investment is first repaid and then they receive a share in
any profit.
These payments are "annual payments" under Case III of
Schedule D with tax deductible under ICTA88/S349. Relief from UK
tax is available under the "Other Income" article (if there is one)
and not the royalties article. In cases of doubt you should
consider asking the claimant the question "Are you a theatrical
angel who has provided financial backing for a theatrical
production and is then entitled to a share of the profits?"
See BIM66601.
