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HMRC internal manual

Theatre Tax Relief

Losses: pre-completion periods

S1216MA Corporation Tax Act 2009 (CTA 2009)

Relief limited to carry forward

The rules in Part 15C CTA 2009 restrict the normal loss relief rules prior to completion of the theatrical production.

Where a Theatrical Production Company has a trading loss in any period before the completion period (the accounting period in which the company ceases to carry on the separate theatrical trade), any loss that is not surrendered for Theatre Tax Credit can only be carried forward to be relieved against profits of the same trade in a subsequent period.

Exceptionally, where a separate theatrical trade for an ongoing theatrical production has made a profit in an earlier year, losses cannot be offset against the profit.  This may occur where income, such as a grant, has created a profit.

This restriction applies to all losses of the separate theatrical trade, not just those attributable to Theatre Tax Relief.

These provisions are not altered by the new loss relief provisions brought in from 1 April 2017 for pre-completion periods.