|
| |
|
(6) | If any production expenditure in respect of the original master version is |
| |
allocated to the relevant period— |
| |
(a) | under section 135 above, or |
| |
(b) | under section 40B of F(No.2)A 1992, |
| |
| no other production expenditure in respect of the original master version may |
| 5 |
be allocated to the relevant period under this section. |
| |
140 | Certified master versions: acquisition expenditure on limited-budget films |
| |
(1) | This section applies if— |
| |
(a) | the person carrying on the trade has incurred acquisition expenditure |
| |
in respect of the original master version of a film in, or before, the |
| 10 |
| |
(b) | the acquisition was a relevant acquisition (see subsection (2)), |
| |
(c) | the expenditure was incurred before 2nd July 2005 (see section 142 for |
| |
| |
(d) | the original master version is a certified master version, |
| 15 |
(e) | the film is genuinely intended for theatrical release, and |
| |
(f) | the total production expenditure in respect of the original master |
| |
version is £15 million or less (see section 141). |
| |
(2) | An acquisition is a relevant acquisition if— |
| |
(a) | the acquisition is by the producer and the producer has not previously |
| 20 |
acquired the original master version of the film, or |
| |
(b) | the acquisition is directly from the producer and the original master |
| |
version of the film has not previously been acquired directly from the |
| |
| |
| and for this purpose “the producer” means the person who commissions the |
| 25 |
making of the film and is entitled to control its exploitation. |
| |
(3) | A deduction is allowed for the amount of the acquisition expenditure allocated |
| |
to the relevant period, but this is subject to the application of any prohibitive |
| |
| |
(4) | The person carrying on the trade may allocate up to 100% of the acquisition |
| 30 |
expenditure to the relevant period. |
| |
(5) | But the total amount allocated under this section may not exceed the total |
| |
production expenditure in respect of the original master version. |
| |
(6) | Expenditure may not be allocated to the relevant period under this section if it |
| |
| 35 |
(a) | under this section to any other relevant period, |
| |
(b) | under any other provision of this Chapter to the relevant period or any |
| |
| |
(c) | under section 42 of F(No.2)A 1992 as applied by section 48(1) to (3) of |
| |
F(No.2)A 1997 to any other relevant period, or |
| 40 |
(d) | under section 40B or 41 of F(No.2)A 1992, or section 42 of that Act (but |
| |
not as applied by section 48(1) to (3) of F(No.2)A 1997), to the relevant |
| |
period or any other relevant period. |
| |
(7) | If any acquisition expenditure in respect of the original master version is |
| |
allocated to the relevant period— |
| 45 |
(a) | under section 135 above, or |
| |
|
| |
|
| |
|
(b) | under section 40B of F(No.2)A 1992, |
| |
| no other acquisition expenditure in respect of the original master version may |
| |
be allocated to the relevant period under this section. |
| |
141 | “Total production expenditure in respect of the original master version” |
| |
(1) | The following provisions of this section define what is meant by “the total |
| 5 |
production expenditure in respect of the original master version” for the |
| |
purposes of sections 139 and 140. |
| |
(2) | “The total production expenditure in respect of the original master version” |
| |
means the total of all the production expenditure in respect of the original |
| |
| 10 |
(a) | whenever the expenditure is incurred, and |
| |
(b) | whether or not it is incurred by the person carrying on the trade. |
| |
(3) | Any expenditure which— |
| |
(a) | has not been paid at the time the film is completed, and |
| |
(b) | is not, at that time, the subject of an unconditional obligation to pay |
| 15 |
within 4 months after the date of completion, |
| |
| |
(4) | Any part of the production expenditure in respect of the original master |
| |
| |
(a) | is incurred by a person under or as a result of a transaction entered into |
| 20 |
directly or indirectly between that person and a connected person, and |
| |
(b) | might have been expected to have been of a greater amount (“the arm’s |
| |
length amount”) if the transaction had been between independent |
| |
persons dealing at arm’s length, |
| |
| is treated as having been of an amount equal to the arm’s length amount. |
| 25 |
142 | When expenditure is incurred |
| |
(1) | This section applies to determine when expenditure is treated as incurred for |
| |
the purposes of sections 139 and 140. |
| |
(2) | The general rule is that an amount of expenditure is treated as incurred as soon |
| |
as there is an unconditional obligation to pay it. |
| 30 |
(3) | The general rule applies even if the whole or a part of the expenditure is not |
| |
required to be paid until a later date. |
| |
(4) | There are the following exceptions to the general rule. |
| |
(5) | If under an agreement— |
| |
(a) | the expenditure is on the provision of an original master version, |
| 35 |
(b) | an unconditional obligation to pay an amount of the expenditure comes |
| |
into being as a result of the giving of a certificate or any other event, |
| |
(c) | the giving of the certificate, or other event, occurs within the period of |
| |
one month after the end of a relevant period, and |
| |
(d) | at or before the end of the relevant period, the original master version |
| 40 |
has become the property of, or is otherwise under the agreement |
| |
attributed to, the person subject to the unconditional obligation to pay, |
| |
| the expenditure is treated as incurred immediately before the end of the |
| |
| |
|
| |
|
| |
|
(6) | If under an agreement an amount of expenditure is not required to be paid |
| |
until a date more than 4 months after the unconditional obligation to pay has |
| |
come into being, the amount is treated as incurred on that date. |
| |
(7) | If under an agreement— |
| |
(a) | there is an unconditional obligation to pay an amount of expenditure |
| 5 |
on a date earlier than accords with normal commercial usage, and |
| |
(b) | the sole or main benefit which might (as a result) have been expected to |
| |
be obtained is that the amount would be treated, under the general rule, |
| |
as incurred at an earlier time, |
| |
| the amount is treated as incurred on the date on or before which it is required |
| 10 |
| |
Election for sections 134 to 140 not to apply |
| |
143 | Election for sections 134 to 140 not to apply |
| |
(1) | A person carrying on a trade which consists of or includes the exploitation of |
| |
original master versions of films may elect for sections 134 to 140 not to apply |
| 15 |
in relation to expenditure if— |
| |
(a) | the person incurs expenditure on the production or acquisition of an |
| |
original master version of a film, |
| |
(b) | the original master version is a certified master version, |
| |
(c) | its value is expected to be realisable over a period of not less than two |
| 20 |
| |
(d) | the film is genuinely intended for theatrical release. |
| |
(2) | The election must relate to all expenditure— |
| |
| |
| 25 |
| on the production or acquisition of the original master version in question. |
| |
(3) | The election is irrevocable. |
| |
(4) | The election must be made on or before the first anniversary of the normal self- |
| |
assessment filing date for the tax year in which ends the relevant period in |
| |
which the original master version of the film is completed. |
| 30 |
(5) | For this purpose a film is completed— |
| |
(a) | at the time given by section 131(5), or |
| |
(b) | if the expenditure is acquisition expenditure and the acquisition takes |
| |
place after that time, at the time of the acquisition. |
| |
(6) | No election may be made in relation to expenditure on the production or |
| 35 |
acquisition of an original master version of a film if any of that expenditure has |
| |
| |
(a) | under any of sections 137 to 140 above, or |
| |
(b) | under section 41 or 42 of F(No.2)A 1992. |
| |
|
| |
|
| |
|
| |
144 | Meaning of “genuinely intended for theatrical release” |
| |
(1) | This section determines for the purposes of this Chapter whether films are |
| |
genuinely intended for theatrical release. |
| |
(2) | The relevant intention is the intention at the time the film is completed of the |
| 5 |
person then entitled to determine how the film is to be exploited. |
| |
(3) | “Theatrical release” means exhibition to the paying public at the commercial |
| |
| |
(4) | A film is not regarded as genuinely intended for theatrical release unless it is |
| |
intended that a significant proportion of the earnings from the film should be |
| 10 |
obtained by exhibition to the paying public at the commercial cinema. |
| |
| |
Trade profits: certain telecommunication rights |
| |
145 | Professions and vocations |
| |
The provisions of this Chapter apply to professions and vocations as they |
| 15 |
| |
146 | Meaning of “relevant telecommunication right” |
| |
In this Chapter a “relevant telecommunication right” means— |
| |
(a) | a licence granted under section 1 of the Wireless Telegraphy Act 1949 |
| |
(c. 54) in accordance with regulations made under section 3 of the |
| 20 |
Wireless Telegraphy Act 1998 (c. 6) (bidding for licences), |
| |
(b) | an indefeasible right to use a telecommunications cable system, or |
| |
(c) | a right derived (directly or indirectly) from such a licence or |
| |
| |
147 | Expenditure and receipts treated as revenue in nature |
| 25 |
(1) | This section applies if, in accordance with generally accepted accounting |
| |
practice, an amount in respect of— |
| |
(a) | expenditure on the acquisition of a relevant telecommunication right, |
| |
| |
(b) | a receipt from the disposal of a relevant telecommunication right, |
| 30 |
| is recognised in the accounts of a trade as an item in the calculation of profit or |
| |
| |
(2) | The amount is treated for income tax purposes as an item of a revenue nature. |
| |
(3) | “The acquisition of a relevant telecommunication right” includes— |
| |
(a) | the extension of rights attached to a relevant telecommunication right, |
| 35 |
| |
(b) | if a relevant telecommunication right is subject to a derivative right, the |
| |
cancellation or restriction of rights attached to the derivative right. |
| |
(4) | “The disposal of a relevant telecommunication right” includes— |
| |
|
| |
|
| |
|
(a) | the cancellation or restriction of rights attached to a relevant |
| |
telecommunication right, and |
| |
(b) | the granting of a derivative right or the extension of rights attached to |
| |
| |
148 | Credits or debits arising from revaluation |
| 5 |
(1) | This section applies if, in accordance with generally accepted accounting |
| |
practice, an amount in respect of the revaluation of a relevant |
| |
telecommunication right is recognised in the accounts of a trade (whether or |
| |
not as an item in the calculation of profit or loss). |
| |
(2) | The amount is treated for income tax purposes as an item of a revenue nature. |
| 10 |
(3) | In calculating the profits of the trade, the amount is brought into account for |
| |
the period of account in which it is recognised. |
| |
| |
Trade profits: other specific trades |
| |
Dealers in securities etc. |
| 15 |
149 | Taxation of amounts taken to reserves |
| |
(1) | This section applies for the purpose of calculating the profits of a person’s |
| |
trade if a profit on the sale of securities would be brought into account in |
| |
calculating the profits of the trade. |
| |
(2) | Profits and losses from the securities that in accordance with generally |
| 20 |
accepted accounting practice are— |
| |
(a) | calculated by reference to the fair value of the securities, and |
| |
(b) | recognised in the person’s statement of recognised gains and losses or |
| |
statement of changes in equity, |
| |
| are brought into account in calculating the profits of the trade. |
| 25 |
(3) | But subsection (2) does not apply— |
| |
(a) | to an amount so far as deriving from or otherwise relating to an amount |
| |
brought into account under that subsection in an earlier period of |
| |
| |
(b) | to an amount recognised for accounting purposes by way of correction |
| 30 |
| |
(4) | In this section “securities” includes— |
| |
| |
(b) | rights of unit holders in unit trust schemes to which TCGA 1992 applies |
| |
as a result of section 99 of TCGA 1992, and |
| 35 |
(c) | in the case of a company with no share capital, interests in the company |
| |
possessed by members of the company, |
| |
| but does not include a loan relationship (within the meaning of Chapter 2 of |
| |
| |
|
| |
|