Corporation Tax Act 2009 (c. 4)

Part 15 U.K. Film production

Modifications etc. (not altering text)

C1 Pt. 15 applied (with modifications) by S.I. 2007/1050, regs. 3-12 (as amended (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 2 para. 131 (with Sch. 2 Pts. 1, 2))

Chapter 2 U.K. Taxation of activities of film production company

Separate film trade U.K.

1188 Activities of film production company treated as a separate trade U.K.

(1) This Chapter applies for corporation tax purposes to a company that is the film production company in relation to a film.

(2) The company's activities in relation to the film are treated as a trade separate from any other activities of the company (including any activities in relation to any other film).

(3) In this Chapter the separate trade is called “the separate film trade”.

(4) The company is treated as beginning to carry on the separate film trade—

(a) when pre-production begins, or

(b) if earlier, when any income from the film is received by the company.

1189 Calculation of profits or losses of separate film trade U.K.

(1) This section applies for the purpose of calculating the profits or losses of the separate film trade.

(2) For the first period of account the following are brought into account—

(a) as a debit, the costs of the film incurred (and represented in work done) to date, and

(b) as a credit, the proportion of the estimated total income from the film treated as earned at the end of that period.

(3) For subsequent periods of account the following are brought into account—

(a) as a debit, the difference between the amount of the costs of the film incurred (and represented in work done) to date and the corresponding amount for the previous period, and

(b) as a credit, the difference between the proportion of the estimated total income from the film treated as earned at the end of that period and the corresponding amount for the previous period.

(4) The proportion of the estimated total income treated as earned at the end of a period of account is given by—

where—

C is the total to date of costs incurred (and represented in work done),

T is the estimated total cost of the film, and

I is the estimated total income from the film.