(1)This section applies if—
(a)a company (“company A”) is the film production company in relation to a qualifying film,
(b)company A ceases to carry on its separate trade in relation to that film (“trade X”) (see section 1188), and
(c)if company A had not ceased to carry on trade X, it could have carried forward an amount under section 393(1) of ICTA to be set against profits of trade X in a later period (“the terminal loss”).
(2)If on cessation of trade X company A—
(a)is the film production company in relation to another qualifying film, and
(b)is carrying on its separate trade in relation to that film (“trade Y”),
it may (on making a claim) make an election under subsection (3).
(3)The election is to have the terminal loss (or a part of it) treated as if it were a loss brought forward under section 393(1) of ICTA to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on.
(4)Subsection (5) applies if on cessation of trade X—
(a)there is another company (“company B”) that is the film production company in relation to a qualifying film,
(b)company B is carrying on its separate trade in relation to that film (“trade Z”), and
(c)company B is in the same group as company A for the purposes of Chapter 4 of Part 10 of ICTA (group relief).
(5)Company A may surrender the terminal loss (or a part of it) to company B.
(6)On the making of a claim by company B the amount surrendered is treated as if it were a loss brought forward by company B under section 393(1) of ICTA to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on.
(7)The Treasury may, in relation to the surrender of a loss under subsection (5) and the resulting claim under subsection (6), make provision by regulations corresponding, subject to such adaptations or other modifications as appear to them to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).
(8)“Qualifying film” means a film in relation to which the conditions for film tax relief are met (see section 1195(2)).