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[F1PART 15EU.K.Museums and galleries exhibition tax relief

Textual Amendments

F1Pt. 15E inserted (for specified purposes and with effect in accordance with Sch. 6 paras. 20, 21(1)(a) of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 1 (with Sch. 6 para. 21(3))

Modifications etc. (not altering text)

C1Pt. 15E modified by 2010 c. 4, s. 357UR(3) (as inserted (with effect in accordance with Sch. 6 para. 20 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 6 para. 17)

C2Pt. 15E modified (temp.) (with application in accordance with s. 21(1)(4) of the amending Act) by Finance Act 2022 (c. 3), s. 21(1)(4)

CHAPTER 3U.K.Museums and galleries exhibition tax relief

Companies qualifying for museums and galleries exhibition tax reliefU.K.

1218ZCACompanies qualifying for museums and galleries exhibition tax reliefU.K.

(1)A company qualifies for museums and galleries exhibition tax relief in relation to the production of an exhibition if conditions A to D are met.

(2)Condition A is that the company is—

(a)the primary production company for the exhibition, or

(b)a secondary production company for the exhibition.

(3)Condition B is that the company is—

(a)a charitable company which maintains a museum or gallery,

(b)wholly owned by a charity which maintains a museum or gallery, or

(c)wholly owned by a local authority which maintains a museum or gallery.

See section 1218ZCB for the interpretation of paragraphs (b) and (c).

(4)Condition C is that at the beginning of the planning stage, the company intends that the exhibition should be public (within the meaning given by section 1218ZAA).

(5)Condition D is that the [F2UK] expenditure condition is met (see section 1218ZCC).

(6)For the purposes of subsection (3) “museum or gallery” includes—

(a)a library or archive, and

(b)a site where a collection of objects or works (or a single object or work) considered to be of scientific, historic, artistic or cultural interest is exhibited outdoors (or partly outdoors).

[F3(6A)For the purposes of subsection (3), the fact that a person is responsible for an exhibition at a venue does not, by itself, mean that the person maintains a museum or gallery.]

(7)There is further related provision in section 1218ZCM (tax avoidance arrangements).

Textual Amendments

F3S. 1218ZCA(6A) inserted (1.4.2022 in relation to an exhibition only where the production stage begins on or after that date) by Finance Act 2022 (c. 3), s. 22(4)(6)

1218ZCBInterpretation of section 1218ZCA(3)(b) and (c)U.K.

(1)For the purposes of section 1218ZCA(3)(b) a company is “wholly owned by a charity which maintains a museum or gallery” if condition A or B is met.

(2)Condition A is that—

(a)the company has an ordinary share capital, and

(b)every part of that share capital is owned by—

(i)a charity which maintains a museum or gallery, or

(ii)two charities, each of which maintains a museum or gallery.

(3)Condition B is that—

(a)the company is limited by guarantee,

(b)there are no more than two beneficiaries of the company, and

(c)the beneficiary, or each beneficiary, is—

(i)a charity which maintains a museum or gallery, or

(ii)a company wholly owned by a charity which maintains a museum or gallery.

(4)For the purposes of section 1218ZCA(3)(c) a company is “wholly owned by a local authority” if—

(a)where the company has an ordinary share capital, every part of that share capital is owned by the local authority, or

(b)where the company is limited by guarantee, the local authority is the sole beneficiary of the company.

(5)Ordinary share capital of a company is treated as owned by a charity or a local authority if the charity or local authority (as the case may be)—

(a)directly or indirectly owns that share capital within the meaning of Chapter 3 of Part 24 of CTA 2010, or

(b)would be taken so to own it if references in that Chapter to a body corporate included references to a charity or local authority which is not a body corporate.

(6)A beneficiary of a company is a person who—

(a)is beneficially entitled to participate in the company’s divisible profits, or

(b)will be beneficially entitled to share in any of the company’s net assets available for distribution on its winding up.

(7)In this section “museum or gallery” has the same meaning it has for the purposes of section 1218ZCA.

1218ZCCThe [F4UK] expenditure conditionU.K.

(1)The “[F5UK] expenditure condition” is that at least [F610%] of the core expenditure on the production of the exhibition incurred by the company is [F5UK] expenditure.

[F7(2)In this Part “UK expenditure” means expenditure on goods or services that are used or consumed in the United Kingdom.]

(3)Any apportionment of expenditure as between [F8expenditure that is and is not UK expenditure] for the purposes of this Part is to be made on a just and reasonable basis.

(4)The Treasury may by regulations—

(a)amend the percentage specified in subsection (1);

(b)amend subsection (2).

(5)See also sections 1218ZE and 1218ZEA (which are about the giving of relief provisionally on the basis that the [F9UK] expenditure condition will be met).

Textual Amendments

1218ZCD“Core expenditure”U.K.

(1)Subject to the following provisions of this section, in this Part “core expenditure”, in relation to a company’s production of an exhibition, means expenditure on the activities involved in producing, deinstalling and closing the exhibition at every relevant venue.

(2)For the purposes of subsection (1) a venue is a “relevant venue” in relation to a company if the company’s activities in relation to the exhibition at the venue form part of the company’s separate exhibition trade.

(3)Expenditure on the activities involved in deinstalling and closing the exhibition at a venue is core expenditure only if the period between the opening and closing of the exhibition at the venue is 12 months or less.

(4)Expenditure on the storage of exhibits for an exhibition which is held at just one venue is not core expenditure.

(5)Where a company incurs expenditure on the storage of exhibits for an exhibition which is held at two or more venues, the amount of such expenditure which is core expenditure is limited to the amount of relevant storage expenditure (if any) incurred by the company in respect of a period of 4 months or less.

(6)For the purposes of subsection (5) expenditure in relation to the exhibition is “relevant storage expenditure” if—

(a)the expenditure is incurred in respect of the storage of exhibits between the deinstallation of the exhibition at one venue and the opening of the exhibition at the next venue, and

(b)the exhibits are not stored at a venue at which the exhibition has been held or is to be held.

(7)Expenditure of the following kinds is not core expenditure—

(a)expenditure on any matters not directly involved with putting on the exhibition (for instance, financing, marketing, legal services[F10, promotional events, and the provision of incidental goods or services to visitors]),

(b)speculative development expenditure on initial exhibition concepts and feasibility,

(c)expenditure on the ordinary running of the exhibition (for instance, invigilation and the maintenance of exhibits),

(d)expenditure in relation to any live performance,

(e)expenditure on further development of the exhibition during the running stage,

(f)expenditure on purchasing the exhibits, and

(g)expenditure on infrastructure, unless that expenditure is incurred solely for the purposes of the exhibition.]

Textual Amendments

F10Words in s. 1218ZCD(7)(a) substituted (with effect in accordance with Sch. 5 para. 3(2) of the amending Act) by Finance Act 2024 (c. 3), Sch. 5 para. 3(1)