Income Tax (Trading and Other Income) Act 2005

139 Certified master versions: production expenditure on limited-budget films U.K.

(1) This section applies if—

(a) the person carrying on the trade has incurred production expenditure in respect of the original master version of a film in, or before, the relevant period,

[F1 (aa) the film was completed in, or before, that period,[F2 and before 1st January 2007]]

[F3 (b) the first day of principal photography was before 1st April 2006,]

(c) the original master version is a certified master version,

[F4 (ca) the original master version was owned by that person at the time the film was completed,]

(d) the film is genuinely intended for theatrical release, F5 . . .

(e) the total production expenditure in respect of the original master version is £15 million or less (see section 141).

[F6 , and

(f) there has not already been a disqualifying deduction in respect of expenditure relating to the film (see section 140A).]

(2) A deduction is allowed for the amount of the production expenditure allocated to the relevant period, but this is subject to the application of any prohibitive rule.

(3) The person carrying on the trade may allocate up to 100% of the production expenditure to the relevant period.

(4) Any expenditure which—

(a) has not been paid at the time the film is completed, and

(b) is not, at that time, the subject of an unconditional obligation to pay within 4 months after the date of completion,

is not regarded as production expenditure for the purposes of this section.

(5) Expenditure may not be allocated to the relevant period under this section if it is allocated—

(a) under this section to any other relevant period,

(b) under any other provision of this Chapter to the relevant period or any other relevant period,

(c) under section 42 of F(No.2)A 1992 as applied by section 48(1) and (2) of F(No.2)A 1997 (corporation tax provision corresponding to this section) to any other relevant period, or

(d) under section 40B or 41 of F(No.2)A 1992F7 . . . to the relevant period or any other relevant period.

(6) If any production expenditure in respect of the original master version is allocated to the relevant period—

(a) under section 135 above, or

(b) under section 40B of F(No.2)A 1992,

no other production expenditure in respect of the original master version may be allocated to the relevant period under this section.

Textual Amendments

F1 S. 139(1)(aa) inserted (with effect as mentioned in Sch. 3 para. 31(2) of the amending Act) by Finance Act 2005 (c. 7), s. 59, Sch. 3 para. 30(2)

F2 Words in s. 139(1)(aa) inserted (with effect as mentioned in s. 58(6) of the amending Act) by Finance Act 2005 (c. 7), s. 58(2)(a)

F3 S. 139(1)(b) substituted (with effect as mentioned in s. 58(6) of the amending Act) by Finance Act 2005 (c. 7), s. 58(2)(b)

F4 S. 139(1)(ca) inserted (with effect as mentioned in Sch. 3 para. 4(4)-(6) of the amending Act) by Finance Act 2005 (c. 7), s. 59, Sch. 3 para. 4(2)

F5 Word in s. 139(1) word repealed (with effect as mentioned in Sch. 3 para. 4(5)(6) of the amending Act) by Finance Act 2005 (c. 7), ss. 59, 104, Sch. 3 para. 4(3), Sch. 11 Pt. 2(3)

F6 S. 139(1)(f) and preceding word inserted (with effect as mentioned in Sch. 3 para. 4(5)(6) of the amending Act) by Finance Act 2005 (c. 7), s. 59, Sch. 3 para. 4(3)

F7 Words in s. 139(5)(d) repealed (with effect as mentioned in Sch. 3 para. 13(2)(3) of the amending Act) by Finance Act 2005 (c. 7), ss. 59, 104, Sch. 3 para. 13(1), Sch. 11 Pt. 2(3)

Modifications etc. (not altering text)

C1 S. 139(1)(aa): power to amend conferred (7.4.2005) by virtue of Finance Act 2005 (c. 7), s. 58(4)

C2 S. 139(1)(b): power to amend conferred (7.4.2005) by virtue of Finance Act 2005 (c. 7), s. 58(4)