Sam Mendes’ psychosexual horror series for Showtime, Penny Dreadful, will be among the first U.S. TV dramas to benefit from the UK’s newly-approved TV tax relief for high-end productions. Legislation for a 25% tax credit for TV series costing at least £1M per hour to produce — plus animated programs and video games — has been given the state-aid greenlight by Brussels, clearing the last major hurdle before coming into effect April 1. Largely based on Britain’s Film Tax Relief scheme, which has provided about £800M in rebates to more than 800 movies since 2007, the new law requires productions meet a British cultural test. Co-productions made under an internationally recognized treaty may also be eligible, and it’s believed the new regs could inject about $570M into the local industry. But there are concerns that the potential £200M in relief available by 2018 could be gobbled up by U.S. productions that employ British talent on UK shores.

When first announced in March last year, the relief was considered an effort to stem runaway production. Shows like BBC Two drama Parade’s End and the Julian Fellowes miniseries Titanic, were made abroad. Downton Abbey is among the rare exceptions of big-ticket UK shows that have been produced at home, and I’m told it will now look to benefit from the break. But the scheme is also a means to encourage foreign shows to come to the UK. Chancellor of the Exchequer George Osborne consulted both Disney and HBO to lay out the strategy.

The Victorian era Penny Dreadful, from Mendes’ London-based Neal Street Productions and created by Skyfall co-writer John Logan, appears to fit the bill exactly as the law intended. Co-executive producer Pippa Harris told Broadcast this week that the tax break was instrumental in being able to shoot in England.

British production consultants Justin Thomson-Glover and Patrick Irwin of Far Moor have warned that UK producers shouldn’t get ahead of themselves. “George Osborne will have missed his target if the major U.S. studios are the principal beneficiaries,” of the new law, Thomson-Glover says. One concern over competition is that producers could be marginalized in their own production sector and left under-crewed. Space is also a concern, but studios like Pinewood have already planned for the new law. Last September, it unveiled cutting-edge upgrades to its TV One and Two stages in anticipation of the tax incentive.

Adrian Wootton, head of the British Film Commission and Film London, which works to attract foreign business, welcomed today’s approval. “This is fantastic news for the industry. That the TV tax relief is in place just a year after it was announced is testament to the Government’s understanding of how vital the production industries are to the UK economy in terms of job creation and investment. Building on the success of the film tax relief, the British Film Commission is already working hard with our partners both here and in the U.S. to ensure that the UK has as much success in attracting major international TV production as we do in attracting major international features.”