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HMRC internal manual

Museums and Galleries Exhibition Tax Relief

Museums and Galleries Exhibition Tax Relief; avoidance; transactions not entered into for genuine commercial reasons

S1218ZCN Corporation Tax Act 2009

The extent to which Museums and Galleries Exhibition Tax Relief (MGETR) is available is dependent on the amount of core expenditure on an exhibition. The minimum amount of core expenditure that is EEA expenditure must be 25%.

Furthermore, because the rate at which surrenderable losses are exchanged for a Museums and Galleries Exhibition Tax Credit (MGETC) can be higher than the rate of Corporation Tax, it may be the case that EEA expenditure is overstated artificially.

Where a transaction is attributable to arrangements entered into otherwise than for genuine commercial reasons and the purpose is to inflate the amount of the additional deduction and MGETC given to a MGEPC then that transaction is disregarded when computing the additional deduction for MGETR.

To prevent the size of the budget being artificially distorted, in determining the size of an exhibition’s   core expenditure:

  • where goods or services are being supplied as a result of transactions entered into (directly or indirectly) between connected persons, and
  • the amount of core expenditure might have been expected to be less, or greater, if the transaction had been between independent parties, then
  • the amount of the expenditure should be established by reference to what the arm’s length value would have been had the parties been unconnected.


The rules for connected persons which should be applied for this purpose are those set out in S1122 and S1123 Corporation Tax Act 2010.