Corporation Tax Act 2009

[F1 1218ZCG “Qualifying expenditure” U.K.

(1) In this Chapter “qualifying expenditure”, in relation to the production of an exhibition, means core expenditure (see section 1218ZCD) on the production that—

(a) falls to be taken into account under sections 1218ZBA to 1218ZBF in calculating the profit or loss of the separate exhibition trade for tax purposes, [F2 and]

(b) is not expenditure which is otherwise relievable,

[F3 (ba) is not excluded by subsection (2A),] F4 ...

F5 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) For the purposes of this section expenditure is “otherwise relievable” if it is expenditure in respect of which [F6 the company would be able to claim]—

F7 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) relief under Part 13 (F8 ... relief for expenditure on research and development),

(c) film tax relief under Chapter 3 of Part 15,

(d) television tax relief under Chapter 3 of Part 15A,

(e) video games tax relief under Chapter 3 of Part 15B,

(f) an additional deduction under Part 15C (theatrical productions),

(g) a theatre tax credit under Part 15C, or

(h) orchestra tax relief under Chapter 3 of Part 15D.

[F9 (2A) Expenditure is excluded to the extent that it represents connected party profit, unless subsection (2C) applies.

(2B) For the purposes of subsection (2A), expenditure represents connected party profit—

(a) if it is a payment to a person (“C”) in exchange for something supplied, transferred or done by that person,

(b) if the company is connected with C, and

(c) if, and to the extent that, the amount of the payment exceeds the expenditure incurred by C in supplying, transferring or doing that thing.

(2C) This subsection applies if the amount of the payment is no more than would have been the case had the transaction been entered into at arm’s length.

(2D) A transaction would have been entered into “at arm’s length” if it made “the arm’s length provision” within the meaning of Part 4 of TIOPA 2010 (and for this purpose any limitation on the application of that Part is to be disregarded).

(2E) Subsections (2F) and (2G) apply if—

(a) the supply by C to the company is one of a sequence of transactions in which the thing supplied has been supplied by one person to another, and

(b) either—

(i) each transacting party in the sequence is connected to at least one other transacting party in the sequence, or

(ii) each transaction in the sequence is entered into in furtherance of a single scheme or arrangement (of whatever kind, and whether or not legally enforceable).

(2F) The reference to C in subsection (2B)(c) is to be read as a reference to the supplier in the first transaction in the sequence.

(2G) The reference to the transaction in subsection (2C) is to be read as including each transaction in the sequence.

(2H) In this section, “payment” includes any transfer of value.]

(3) The Treasury may by regulations amend paragraph (c) of subsection (1) so as to substitute a later date for the date for the time being specified in that paragraph.]

Textual Amendments

F1 Pt. 15E inserted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(a) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 1 (with Sch. 6 para. 21(3))

F2 Word in s. 1218ZCG(1)(a) inserted (24.5.2024) by Finance (No. 2) Act 2024 (c. 12), s. 18(1)(b)

F3 S. 1218ZCG(1)(ba) inserted (with effect in accordance with Sch. 5 para. 6(4) of the amending Act) by Finance Act 2024 (c. 3), Sch. 5 para. 6(2)

F4 Word in s. 1218ZCG(1) omitted (24.5.2024) by virtue of Finance (No. 2) Act 2024 (c. 12), s. 18(1)(b)

F5 S. 1218ZCG(1)(c) omitted (24.5.2024) by virtue of Finance (No. 2) Act 2024 (c. 12), s. 18(1)(a)

F6 Words in s. 1218ZCG(2) substituted (with effect in accordance with Sch. 5 para. 7(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 5 para. 7(1)

F7 S. 1218ZCG(2)(a) omitted (with effect in relation to accounting periods beginning on or after 1.4.2024) by virtue of Finance Act 2024 (c. 3), Sch. 1 paras. 12(8)(a), 16; S.I. 2024/286, reg. 2

F8 Word in s. 1218ZCG(2)(b) omitted (with effect in relation to accounting periods beginning on or after 1.4.2024) by virtue of Finance Act 2024 (c. 3), Sch. 1 paras. 12(8)(b), 16; S.I. 2024/286, reg. 2

F9 S. 1218ZCG(2A)-(2H) inserted (with effect in accordance with Sch. 5 para. 6(4) of the amending Act) by Finance Act 2024 (c. 3), Sch. 5 para. 6(3)