Part 13Tax avoidance

Chapter 5Avoidance involving trading losses

Individuals claiming relief for film-related trading losses

800Meaning of “film-related losses” etc

(1)

This section applies for the purposes of sections 797, 801 and 802.

(2)

A loss is a “film-related loss” if the calculation of profits or losses that it results from is made in accordance with any provision of Chapter 9 of Part 2 of ITTOIA 2005.

(3)

“The individual's claimed film-related losses” means—

(a)

the total amount of film-related losses made by the individual in the trade so far as they are losses for which the individual has made a relevant claim, less

(b)

the amount of any relevant recovered relief.

(4)

“The amount of any relevant recovered relief” means—

(a)

amount A, or

(b)

if less, amount B.

(5)

Amount A is the total amount of income treated as received by the individual under section 792 (recovery of excess relief) as a result of the application of that section in relation to claims for relief for losses made by the individual in the trade.

(6)

Amount B is the total amount of film-related losses within subsection (7) for which the individual has made a relevant claim.

(7)

A loss is within this subsection if it is made by the individual in the trade—

(a)

in a tax year at a time during which the individual carries on the trade as a member of an LLP or as a limited partner, or

(b)

in an early tax year during which the individual carries on the trade as a non-active partner.

(8)

Expressions used in subsection (7) are to be read as if contained in Chapter 3 of Part 4.

(9)

Subsection (10) applies if—

(a)

the individual has made a relevant claim for a film-related loss made in the trade as a partner in a firm, and

(b)

the firm is carrying on, or has carried on, more than one trade.

(10)

For the purpose of determining the individual's claimed film-related losses—

(a)

apply subsection (3)(a) in relation to each of the trades and then add the results together,

(b)

apply subsection (5) as if the reference to the trade were a reference to any of the trades, and

(c)

apply subsections (6) and (7) in relation to each of the trades and then add the results together.