Corporation Tax Act 2009

1211 Terminal losses U.K.

(1) This section applies if—

(a) a company (“company A”) is the film production company in relation to a qualifying film,

(b) company A ceases to carry on its separate trade in relation to that film (“trade X”) (see section 1188), and

(c) if company A had not ceased to carry on trade X, it could have carried forward an amount under [F1 section 45[F2 , 45A or 45B] of CTA 2010] to be set against profits of F3 ... a later period (“the terminal loss”).

(2) If on cessation of trade X company A—

(a) is the film production company in relation to another qualifying film, and

(b) is carrying on its separate trade in relation to that film (“trade Y”),

it may (on making a claim) make an election under subsection (3).

(3) The election is to have the terminal loss (or a part of it) treated[F4 —

(a) in a case where the loss could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on, and

(b) in a case where the loss could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Y which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.]

(4) Subsection (5) applies if on cessation of trade X—

(a) there is another company (“company B”) that is the film production company in relation to a qualifying film,

(b) company B is carrying on its separate trade in relation to that film (“trade Z”), and

(c) company B is in the same group as company A for the purposes of [F5 Part 5 of CTA 2010] (group relief).

(5) Company A may surrender the terminal loss (or a part of it) to company B.

(6) On the making of a claim by company B the amount surrendered is treated[F6 —

(a) in a case where the amount could have been carried forward under section 45 of CTA 2010 had trade X not ceased, as if it were a loss carried forward under that section to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on, and

(b) in a case where the amount could have been carried forward under section 45A or 45B of CTA 2010 had trade X not ceased, as if it were a loss made in trade Z which has been carried forward under section 45B of that Act to the first accounting period beginning after the cessation.]

(7) The Treasury may, in relation to the surrender of a loss under subsection (5) and the resulting claim under subsection (6), make provision by regulations corresponding, subject to such adaptations or other modifications as appear to them to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).

[F7 (7A) A deduction under section 45 or 45B of CTA 2010 which is made in reliance on this section is to be ignored for the purposes of section 269ZB of that Act (restriction on deductions from trading profits).]

(8) “Qualifying film” means a film in relation to which the conditions for film tax relief are met (see section 1195(2)).

Textual Amendments

F1 Words in s. 1211(1)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 682(2) (with Sch. 2)

F2 Words in s. 1211(1)(c) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 30(2)(a)

F3 Words in s. 1211(1)(c) omitted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 30(2)(b)

F4 Words in s. 1211(3) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 30(3)

F5 Words in s. 1211(4)(c) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 682(4) (with Sch. 2)

F6 Words in s. 1211(6) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 30(4)

F7 S. 1211(7A) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 30(5)

Modifications etc. (not altering text)

C1 S. 1211 modified by 2010 c. 4, s. 357RH (as inserted (with effect in accordance with s. 5 of the amending Act) by Corporation Tax (Northern Ireland) Act 2015 (c. 21), s. 1)