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HMRC internal manual

Film Production Company Manual

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HM Revenue & Customs
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Film Production Companies: Losses: Transfer of trade

ICTA88/S343

ICTA88/S343 applies to transfers of a trade between companies in common ownership. Thelegislation prevents the trade from being treated as permanently discontinued in the handsof the first company and a new trade starting in the hands of the second company. Instead,ICTA88/S343 treats the second company as succeeding to the trade of the first company.

The film tax regime introduced by FA06 permits only one company to be the film productioncompany (FPC) in relation to a film and treats the activities of that company in relationto each film as a separate trade.

Once a film production activity has commenced it is impossible for a second company tosucceed to the trade in relation to the film. Section 343 therefore does not apply

Where an FPC carries on a trade in relation to an FTR-qualifying film and that tradeceases it may be able to pass any losses on either:
 

  • to another trade in relation to a qualifying film that it is carrying on at the time of the cessation, or
  • to another trade in relation to a qualifying film that another group company is carrying on at the time of the cessation.

See FPC30040 for details.