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HMRC internal manual

Film Production Company Manual

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HM Revenue & Customs
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FA06/Chapter 3: Commencement & Transition: Withdrawal of previous reliefs: General

FA06/S46 & S47

FA06/S46 and FA06/S47 remove, respectively, the previous corporation and income tax reliefs for film production and acquisition:
 

  • FA06/S46 and FA06/S47 (1)(a) and (1)(b)(i) disapply F2A92/S40A, F2A92/S40B, F2A92/S40C , F2A92/S40D and ITTOIA2005/S134 and ITTOIA2005/S135 – which deem expenditure on production or acquisition of the original master version of a film to be revenue, not capital, specify how the expenditure is to be allocated to periods, and allow British films to elect out of this treatment – for films which commence principal photography on or after 1 January 2007
  • FA06/S46 and FA06/S47 (1)(b)(ii) further disapply F2A92/S40A, F2A92/S40B, F2A92/S40C , F2A92/S40D and ITTOIA2005/S134 and ITTOIA2005/S135, for any acquisition expenditure incurred on or after 1 October 2007;
  • FA06/S46(2) and FA06/S47(2) disapply the relief for preliminary expenditure on film production, in F2A92/S41 and ITTOIA2005/S137, for expenditure incurred after 19 July 2006;
  • FA06/S46 and FA06/S47 (3)(a) and (3)(b)(i) disapply the relief for expenditure on film production or acquisition, in F2A92/S42, F2A97/S48 and ITTOIA2005/S138-144, for films which commence principal photography on or after 1 January 2007; and,
  • FA06/S46 and FA06/S47 (3)(b)(ii) disapply the relief for expenditure on film acquisition, in F2A92/S42, F2A97/S48 and ITTOIA2005/S138-144, for any acquisition expenditure incurred on or after 1 October 2007.

FA06/S51amends FA02/SCH29, the regime for the taxation of gains and losses from intangible fixed assets (“the IP regime”), from which films are currently excluded, so that the exclusion only applies to production expenditure.