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HMRC internal manual

Theatre Tax Relief

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HM Revenue & Customs
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Losses: Theatrical 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 theatrical trades between companies in common ownership.

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

The theatre tax regime permits only one company to be the Theatrical Production Company (TPC) in relation to a production and treats the activities of that company in relation to each production as a separate theatrical trade.

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

Where a TPC carries on a separate theatrical trade in relation to a qualifying production and that trade ceases, it may be able to pass any losses on to:

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

See TTR30050 for details.