New Zealand offers film grants

Peter Jackson will film King Kong in the country

New Zealand is hoping to attract more big-budget film and television productions with a grant that will cut production costs by 12.5%.

Any film or TV project which spends more than NZ$50m (£18m) will qualify for the tax-exempt grant, the New Zealand Government announced on Monday.

The country is already a popular film location, largely due to the success of The Lord of the Rings trilogy, which was filmed in various New Zealand locations.

Films recently shot there include a biography of Sylvia Plath starring Gwyneth Paltrow and Tom Cruise epic The Last of the Sumarai.

Cruise and other cast and crew were hit by surprise tax demands from the New Zealand Government earlier this year.

The bills asked for tax to be paid on daily living allowances, angering industry officials in the country.

Under the scheme, film projects costing between NZ$15-50m (£5.3 - £18m) will also be eligible for the grant when the figure equates to at least 70% of total production spending.

The New Zealand Government has a budget of NZ$40m (£14m) for the grants.

Economic Development Minister Jim Anderton said it would encourage more international filmmakers to come to the country.

The BBC filmed TV series The Lost World in New Zealand

Neighbouring Australia already has a similar scheme where a 12.5% tax rebate is granted on the tax paid on a film's profits.

Producers are already considering filming in New Zealand as a result of the announcement.

An overseas production company is planning to make a film based on CS Lewis's Narnia novels and has expressed interest in shooting the film in New Zealand.

Mr Anderton said he would be contacting the Narnia filmmakers with more information.

Potentially, this could result in five films adapted from the classic children's books being made in New Zealand over the next 10 years.

Lord of the Rings director Peter Jackson will also be filming the remake of King Kong in his native country.

The Lord of the Rings trilogy was the last time any film received a tax break in New Zealand, using an old loophole reopened temporarily by the previous government to guarantee the films were made there.