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HMRC internal manual

Theatre Tax Relief

Claims: abandonment

S1717M, 1217FC and 1217NA Corporation Tax Act 2009 (CTA 2009)

If a production is abandoned at any point during the production phases, the abandonment will mean that the Theatrical Production Company (TPC) has ceased to carry on the separate theatrical trade in respect of that production because it has ceased to satisfy the conditions at S1217FC CTA 2009.

The TPC can still claim relief for qualifying production expenditure incurred before the production was abandoned provided that the EEA expenditure condition is met (TTR40040).  If the bulk of the EEA expenditure was planned to fall later in the production phases, after the point at which the production was abandoned this condition may not be satisfied and relief may be clawed back (S1217NA CTA 2009).

The commercial purpose condition (TTR40020) does not specifically address abandonment.  Strictly, once a production is abandoned, it cannot any longer be intended to run live performances to paying members of the general public or for educational purposes.  However, in such circumstances, a production will be deemed to meet the condition if it would have met it immediately before abandonment.