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HMRC internal manual

Orchestra Tax Relief

Orchestra Tax Relief: losses: orchestral production companies: transfer of trade

S940B – S953 Corporation Tax Act 2010 (CTA 2010)

The rules on transfers of trades in CTA 2010 do not apply to transfers of separate orchestral trades between companies in common ownership.

The legislation in CTA 2010 prevents the separate orchestral trade from being treated as permanently discontinued in the hands of the first company and a new orchestral trade starting in the hands of the second company.  Instead, the second company is treated as succeeding to the orchestral trade of the first company.

The orchestra tax regime permits only one company to be the Orchestral Production Company (OPC) in relation to a concert or series of concerts and treats the activities of that company in relation to each concert or series as a separate theatrical trade.

As a result, once a separate orchestral trade has commenced it is impossible for a second company to succeed to the trade in relation to the concert or series.  The rules in CTA 2010 do not apply.

Where an OPC carries on a separate orchestral trade in relation to a qualifying concert or series and that trade ceases, it may be able to pass any losses on to:

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

 

See OTR40050 for details.