Part 13Tax avoidance
Chapter 5Avoidance involving trading losses
Individuals claiming relief for film-related trading losses
797Individuals claiming sideways or capital gains relief for film-related losses
1
This section applies if—
a
an individual makes a film-related loss (see section 800) in a trade for which the individual claims sideways relief or capital gains relief (a “relevant claim”),
b
there is a disposal of a right of the individual to profits arising from the trade (a “relevant disposal”) (see section 799), and
c
an exit event occurs.
2
An exit event occurs whenever—
a
the individual receives any non-taxable consideration (see section 798) for a relevant disposal, or
b
an increase in the individual's claimed film-related losses (see section 800) or a decrease in the individual's capital contribution (see section 801) results in—
i
those losses becoming greater than that contribution, or
ii
an increase in the amount by which those losses exceed that contribution.
3
The individual is treated as receiving an amount of income every time a chargeable event occurs.
The income is treated as arising otherwise than as profits of the trade.
4
A chargeable event occurs whenever—
a
the individual makes a relevant claim (if by that time a relevant disposal and an exit event have occurred),
b
a relevant disposal occurs (if by that time an exit event has occurred and the individual has made a relevant claim), or
c
an exit event occurs (if by that time a relevant disposal has occurred and the individual has made a relevant claim).
5
The amount of income treated as received when a chargeable event occurs is equal to the sum of—
a
the total amount or value of all non-taxable consideration received by the individual for relevant disposals, and
b
the amount (if any) by which the individual's claimed film-related losses exceed the individual's capital contribution.
The calculation in this subsection is made immediately after the chargeable event occurs and is subject to section 803.
6
For the purposes of this section it does not matter—
a
if the individual (or anyone else) is still carrying on the trade when a chargeable event occurs, or
b
if the individual receives both non-taxable and taxable consideration for a relevant disposal.