Part 2Trading income
Chapter 9Trade profits: films and sound recordings
Certified master versions: limited-budget films
139Certified master versions: production expenditure on limited-budget films
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,
b
the expenditure was incurred before 2nd July 2005 (see section 142 for timing rule),
c
the original master version is a certified master version,
d
the film is genuinely intended for theatrical release, and
e
the total production expenditure in respect of the original master version is £15 million or less (see section 141).
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 1992, or section 42 of that Act (but not as applied by section 48(1) and (2) of F(No.2)A 1997), 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.