Part 13Tax avoidance
Chapter 5Avoidance involving trading losses
Individuals claiming relief for film-related trading losses
799Meaning of “disposal of a right of the individual to profits” etc
1
For the purposes of section 797 any reference to a disposal of a right of an individual to profits arising from a trade includes, in particular, any of events A to D.
2
Event A is the disposal, giving up or loss by—
a
the individual, or
b
a firm in which the individual is a partner,
of a right arising from the trade to income (or any part of any income).
It does not matter if the right is disposed of, given up or lost as part of a larger disposal, giving up or loss.
3
Event B is the disposal, giving up or loss of the individual's interest in a firm that carries on the trade (including the dissolution of the firm).
4
Event C is a default in the payment of income to which—
a
the individual, or
b
a firm in which the individual is a partner,
has a right arising from the trade.
5
Event D is a change in the individual's entitlement to any profits or losses arising from the trade the effect of which is that—
a
the individual's share of any profits is reduced (including to nil), or
b
the individual becomes entitled to a share, or a greater share, of any losses without becoming entitled to a corresponding share of profits.
6
The changes covered by event D include cases where there is an agreement under which the individual is entitled—
a
to a particular share of any profits or losses arising from the trade in a period (including a nil share), and
b
to a different share of any such profits or losses in a succeeding period (including a nil share).
7
In such cases the change in the individual's entitlement is treated for the purposes of section 797 as occurring at the beginning of the succeeding period.