Prince Caspian to Qualify as “British” Movie – “Chronicles of Narnia: Prince Caspian,” the second movie in Disney and Walden Media’s “Narnia” franchise, will qualify as a British film under the U.K.’s new cultural test, despite the fact that the majority of filming will take place in the Czech Republic.

That means Disney and Walden will be able to access tax credits worth 20% of their U.K. expenditure. They are planning to do most of the post-production and special efforts work in the U.K., making up a large proportion of the movie’s budget.

Execs at the U.K. Film Council regard this as positive example of how Blighty’s new system of tax credits will benefit the British film industry by attracting production expenditure — in this case f/x work — to the U.K.

The first Narnia movie, “The Lion, the Witch and the Wardrobe,” which shot largely in New Zealand, could not qualify as a British film under the old tax rules, abolished last April.

As a result, the producers did not have any incentive to use British crews or to spend money in the U.K., even though the franchise is based on a series of classic British children’s books.

“We are pleased to confirm that ‘Prince Caspian’ is expected to qualify as a British film under the government’s new cultural points test,” Disney said in a statement. “While the majority of filming will take place outside the U.K., the majority of the post production and visual effects, which constitute a significant part of the overall production budget, will take place in the U.K.”

Under the new system, “Prince Caspian,” albeit directed by New Zealander Andrew Adamson, will qualify as British largely because it is based on a British book, with British leading characters (played by British actors) and a British setting. The rules make allowance for the fact that Narnia is an imaginary place, but one infused with a British sensibility.

None of these factors counted under the old tax system, where qualification was based purely on expenditure, and where relevant on the terms of co-production treaties.

“The Lion, the Witch and the Wardrobe,” which shot in New Zealand and the Czech Republic, and used f/x houses in Los Angeles and New Zealand, did not spend anywhere near enough in the U.K. to qualify, and did not fit into the U.K./N.Z. treaty.

U.K. Film Council insiders suggest that the decision by Disney and Walden to use British f/x for “Prince Caspian” was partly encouraged by the tax credit, but also reflects the giant strides that the U.K. post houses have taken in creative quality thanks to their experience working on such pics as the Harry Potter franchise.