Part II Income Tax, Corporation Tax and Capital Gains Tax
Chapter I General
Films
C142 Relief for production or acquisition expenditure.
1
Subject to the following provisions of this section and any other provisions of the Tax Acts, in computing for tax purposes the profits or gains accruing to a person in a relevant period from a trade or business which consists of or includes the exploitation of films, that person shall (on making a claim) be entitled to deduct an amount in respect of any expenditure—
a
which is expenditure to which subsection (2) or (3) below applies, and
b
in respect of which no deduction has been made by virtue of subsections (3) to (6) of section 68 of the 1990 Act and no election has been made under subsection (9) of that section.
2
This subsection applies to any expenditure of a revenue nature incurred by the claimant on the production of a film—
a
which was completed in the relevant period to which the claim relates or an earlier relevant period, and
b
the master negative of which or any master tape or master disc of which is a qualifying film, tape or disc.
3
This subsection applies to any expenditure of a revenue nature incurred by the claimant on the acquisition of the master negative of a film or any master tape or master disc of a film where—
a
the film was completed in the relevant period to which the claim relates or an earlier relevant period, and
b
the master negative, tape or disc is a qualifying film, tape or disc.
4
Any amount deducted for a relevant period under subsection (1) above shall not exceed—
a
one third of the total expenditure incurred by the claimant on the production of the film concerned or the acquisition of the master negative or any master tape or master disc of it,
b
one third of the sum obtained by deducting from the amount of that total expenditure the amount of so much of that total expenditure as has already been deducted by virtue of section 41 above, or
c
so much of that total expenditure as has not already been deducted by virtue of section 68(3) to (6) of the 1990 Act, section 41 above or this section,
whichever is less.
5
In relation to a relevant period of less than twelve months, the references to one third in subsection (4) above shall be read as references to a proportionately smaller fraction.
F16
A claim under this section shall be made—
a
for the purposes of income tax, on or before the first anniversary of the 31st January next following the year of assessment in which ends the relevant period to which the claim relates,
b
for the purposes of corporation tax, not later than two years after the end of the relevant period to which the claim relates,
and shall be irrevocable.
7
Where any expenditure is deducted by virtue of section 68(3) to (6) of the 1990 Act in computing the profits or gains of a trade or business for a relevant period, no deduction shall be made under this section for that relevant period in respect of expenditure incurred on the production or acquisition of the film concerned.
8
This section does not apply to the F2profits of a trade in which the film concerned constitutes trading stock, as defined in section 100(2) of the Taxes Act 1988.
F39
This section has effect in relation to expenditure incurred -
a
on the production of a film completed on or after 10th March 1992, or
b
on the acquisition of the master negative, master tape or master disc of a film completed on or after that date.