Part 4Loss relief
Chapter 3Restrictions on trade loss relief for certain partners
Restrictions for film trades carried on in partnership
115Restrictions on reliefs for firms exploiting films
1
This section applies if—
a
an individual carries on a trade as a partner in a firm at a time during a tax year,
b
the trade consists of or includes the exploitation of films,
c
the individual makes a loss in the trade in the tax year (“the affected tax year”),
d
the individual does not devote a significant amount of time to the trade in the relevant period for the affected tax year (see section 112),
e
the affected tax year is the one in which the individual first started to carry on the trade or is one of the next 3 tax years, and
f
a relevant agreement existed at a time during the affected tax year which guaranteed the individual an amount of income (see subsections (5) to (9)).
2
Sideways relief for the loss is not available to the individual, except against any of the individual’s income which consists of profits of the trade.
3
Capital gains relief for the loss is not available to the individual.
4
But see section 116 (exclusion from restrictions for certain film expenditure).
5
An agreement is relevant if—
a
it is an agreement made with a view to the individual’s carrying on the trade,
b
it is an agreement made in the course of the individual’s carrying it on, or
c
it is related to an agreement falling within paragraph (a) or (b).
6
An agreement is relevant whether or not the individual is or may be required under the agreement to contribute an amount to the trade.
7
Agreements are related to one another if they are entered into under the same arrangement (regardless of when either agreement is entered into).
8
A relevant agreement guarantees the individual an amount of income if it (or any part of it) is designed to secure the receipt by the individual of that amount (or at least that amount) of income.
9
It does not matter when the amount of income is (or is to be) received.
10
In this section “film” is to be read in accordance with paragraph 1 of Schedule 1 to the Films Act 1985 (c. 21).