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HMRC internal manual

Film Production Company Manual

FA06/Chapter 3: Commencement & Transition: 'Overlapping' films (those in progress at 1 January 2007)


Regulations set out how the FA06 film tax regime applies to overlapping films.

These regulations:

  • modify the commencement and transition rules (FPC90100) so far as overlapping films are concerned.
  • modify the definition of a film production company( FPC) (FPC10110) for overlapping films that started principal photography before 1 January 2007.

Without modification, FA06/S46 and FA06/S47 would continue to allow overlapping films relief for production expenditure under the previous rules indefinitely, regardless of when production is completed, subject to the 1 October 2007 deadline for acquisitions (FPC90100).

As modified, FA06/S46, FA06/S47 and FA06/S51 instead withdraw relief under the old rules for expenditure:

  • on any film not completed by 1 January 2007 , that
  • is intended for theatrical release at the time principal photography begins, and that is;
  • certified as British either because it passes the second “cultural test” introduced into Schedule 1 of the Films Act 1985 by SI2006/3430 (The Films (Definition of British Film) (No 2) Order 2006), or as a qualifying co-production.

Films which are so certified (and intended, when principal photography begins, for theatrical release) are brought into the new relief by modifications to FA06/SCH4/PARA1 and FA06/SCH5/PARA1