Rupert Grint faces $2.3 million tax bill for ‘Harry Potter’ residuals after ruling.
According to the Associated Press, the ‘Harry Potter’ star now owes £1.8 million ($2.3 million) in taxes from his earnings on the series. Grint’s representatives did not respond to Entertainment Weekly’s request for comment.
In 2019, Grint was asked to pay extra taxes after the HMRC said he wrongly classified £4.5 million from ‘Harry Potter’ residuals as a capital asset instead of income. After Grint’s lawyers appealed, Judge Harriet Morgan ruled in favor of the HMRC, agreeing that the residuals from TV and DVD sales of the movies are income, not a capital asset.
The actor tried to reduce his taxable income by creating a company called Clay 10 Limited in 2011 and selling his residual rights to it as capital, according to The Telegraph. As of March 2023, Clay 10 had over £27 million ($34 million) in equity, based on a December 2023 filing.
The HMRC referred to the ‘Beatles clause,’ saying Grint tried to use the same tax loophole the Beatles used in the 1960s by creating a company and selling his music rights to it to pay a lower tax. The actor said he wasn’t very involved in his finances, and Judge Morgan agreed. She noted that he trusted his father and accountants to handle his money, according to The Telegraph.
This isn’t Rupert’s first tax case. In 2016, he lost a case over a £1 million tax refund. A judge blocked his attempt to use a change in accounting dates to avoid a higher 50% tax rate. Grint had followed advice to move his accounting date, so 20 months of income would be taxed in 2009-10. This would have saved him about £1 million.
Grint started acting in 2001’s ‘Harry Potter and the Sorcerer’s Stone’ when he was 12. He played Ron in all eight films, earning around £27 million. Unlike his co-stars, Daniel Radcliffe and Emma Watson, Grint has stayed out of the spotlight. Recently, he’s appeared in ‘Knock at the Cabin,’ ‘Servant,’ and an episode of ‘Guillermo del Toro’s Cabinet of Curiosities.’
