|
| |
|
Section 142 of the Income Tax (Trading and Other Income) Act 2005 |
| |
16 (1) | In section 142 of ITTOIA 2005 (when expenditure is incurred), in subsection |
| |
(1) for “139 and” substitute “138 to”. |
| |
(2) | The amendment made by this paragraph has effect for the year 2005-06 and |
| |
subsequent years of assessment. |
| 5 |
(3) | But that amendment does not have effect— |
| |
(a) | in relation to films which had their first day of principal |
| |
photography before 2nd December 2004, or |
| |
(b) | in relation to pre-announcement expenditure. |
| |
| 10 |
Minor and consequential amendments |
| |
Income and Corporation Taxes Act 1988 (c. 1) |
| |
17 | Section 118ZM of ICTA (partnerships exploiting films: supplementary), as |
| |
that section has effect for years of assessment before the year 2005-06, has |
| |
effect as if for subsection (4) there were substituted— |
| 15 |
“(4) | The reference in section 118ZL(6) to the acquisition of a film is a |
| |
reference to the acquisition of the original master version of the film; |
| |
and this subsection is to be construed in accordance with section 43 |
| |
of the Finance (No.2) Act 1992.” |
| |
Finance (No.2) Act 1992 (c. 48) |
| 20 |
18 (1) | Section 40A of F(No.2)A 1992 (revenue nature of expenditure on master |
| |
versions of films) is amended as follows. |
| |
(2) | In subsection (1) for “a master” substitute “the original master”. |
| |
(3) | In subsection (2) for “the master” in both places substitute “the original |
| |
| 25 |
| |
(a) | for “a master” substitute “the original master”, and |
| |
(b) | for “the master” in both places substitute “the original master”. |
| |
| |
19 (1) | Section 40B of F(No.2)A 1992 (allocation of expenditure to periods) is |
| 30 |
| |
| |
(a) | after “exploitation of” insert “original”, and |
| |
(b) | in paragraph (a) for “a master” substitute “the original master”. |
| |
(3) | In subsections (4) and (5) for “the master”, in each place, substitute “the |
| 35 |
| |
20 | In section 40C of F(No.2)A 1992 (cases where section 40B does not apply), for |
| |
“the master” in both places substitute “the original master”. |
| |
|
| |
|
| |
|
21 (1) | Section 40D of F(No.2)A 1992 (election for sections 40A and 40B not to apply) |
| |
| |
| |
| |
(i) | in sub-paragraph (i) after “exploitation of” insert “original”, |
| 5 |
| |
(ii) | in sub-paragraph (ii) for “a master” substitute “the original |
| |
| |
(b) | in paragraphs (b) and (c) for “the master” substitute “the original |
| |
| 10 |
(3) | In each of the following provisions for “the master”, in each place it occurs, |
| |
substitute “the original master”— |
| |
| |
subsection (4) as it has effect, after 5th April 2005, for corporation tax |
| |
purposes for accounting periods ending after that date; |
| 15 |
subsection (4) as it has effect in any other case; |
| |
| |
(4) | In subsection (7) for “a master” substitute “the original master”. |
| |
22 (1) | Section 41 of F(No.2)A 1992 (relief for preliminary expenditure) is amended |
| |
| 20 |
(2) | In subsection (1) after “exploitation of” insert “original master versions of”. |
| |
(3) | In subsections (3) and (4) for “master negative of the film or any master tape |
| |
or master disc” substitute “original master version”. |
| |
(4) | In subsection (5) after “expenditure on” insert “the original master version |
| |
| 25 |
23 (1) | Section 42 of F(No.2)A 1992 (relief for production or acquisition |
| |
expenditure) is amended as follows. |
| |
(2) | In subsection (1) after “exploitation” insert “of original master versions”. |
| |
| |
(a) | for “of a film—” substitute “of the original master version of a film |
| 30 |
| |
(b) | in paragraph (a) for first “which” substitute “the film”, and |
| |
(c) | in paragraph (b) for “master negative of which or any master tape or |
| |
master disc of which” substitute “original master version of the film”. |
| |
| 35 |
(a) | for “master negative of a film or any master tape or master disc” |
| |
substitute “original master version”, and |
| |
(b) | in paragraph (b) for “master negative, tape or disc” substitute |
| |
“original master version of the film”. |
| |
(5) | In subsection (4)(a) for the words from “of the film” to the end substitute “or |
| 40 |
acquisition of the original master version of the film concerned”. |
| |
(6) | In subsection (7) after “acquisition” insert “of the original master version”. |
| |
(7) | In subsection (8) for “the film” substitute “the original master version of the |
| |
| |
|
| |
|
| |
|
| |
(a) | in paragraph (a), after “production” insert “of the original master |
| |
| |
(b) | in paragraph (b), for “master negative, master tape or master disc” |
| |
substitute “original master version”. |
| 5 |
24 (1) | Section 43 of F(No.2)A 1992 (interpretation of provisions relating to films) is |
| |
| |
| |
(a) | insert the following definitions at the appropriate place— |
| |
““film” is to be construed in accordance with paragraph |
| 10 |
1 of Schedule 1 to the Films Act 1985;” |
| |
““original master version”, in relation to a film, means |
| |
the original master negative, tape or disc (but see |
| |
subsections (2) and (2A));”, |
| |
(b) | omit the following definitions— |
| 15 |
| |
| |
| |
(c) | in the definition of “qualifying disc”, “qualifying film” and |
| |
“qualifying tape” for “a master” substitute “the original master”. |
| 20 |
(3) | For subsection (2) substitute— |
| |
“(2) | In sections 40A to 42 and this section, references to the original |
| |
master version of a film include the original master version of the |
| |
film soundtrack (if any). |
| |
(2A) | In those provisions, references to the original master version also |
| 25 |
include any rights in the original master version that are held or |
| |
| |
| |
25 | In Schedule 12 to FA 1997 (leasing arrangements: finance leases and loans) |
| |
(as amended by Schedule 1 to ITTOIA 2005), in paragraph 11(9) after “138,” |
| 30 |
| |
Finance (No. 2) Act 1997 (c. 58) |
| |
26 (1) | Section 48 of F(No. 2)A 1997 (which modifies section 42 of F(No. 2)A 1992 as |
| |
it applies in relation to certain expenditure) is amended as follows. |
| |
(2) | In subsection (1), in the inserted subsection (4), for the words from “on—” to |
| 35 |
the end of paragraph (b) substitute “on the production or acquisition of the |
| |
original master version of the film concerned,”. |
| |
(3) | For subsection (6) substitute— |
| |
“(6) | In this section “total production expenditure” on a film, in relation to |
| |
a claim for relief under section 42 of the Finance (No.2) Act 1992, |
| 40 |
means (subject to subsections (6A) and (7) below) the total of all |
| |
expenditure incurred on the production of the original master |
| |
version of the film, including expenditure incurred before 2nd July |
| |
1997 and whether or not incurred by the claimant.” |
| |
|
| |
|
| |
|
(4) | In subsection (6A) for “the production expenditure on” substitute “the |
| |
expenditure incurred on the production of the original master version of”. |
| |
(5) | In subsection (7), in paragraph (a) after “production of” insert “the original |
| |
| |
(6) | After subsection (7) insert— |
| 5 |
| |
“film” has the meaning given by section 43 of the Finance (No. |
| |
| |
“original master version” is to be construed in accordance with |
| |
| 10 |
Capital Allowances Act 2001 (c. 2) |
| |
27 (1) | Paragraph 116 of Schedule 3 to CAA 2001 (transitional provision relating to |
| |
sections 40A to 40D of F(No.2)A 1992 (films)) is amended as follows. |
| |
(2) | In sub-paragraph (2)(b), for “master” in both places substitute “original |
| |
| 15 |
(3) | In sub-paragraph (2)(c)— |
| |
(a) | for ““film,” substitute ““a film,”, |
| |
(b) | for first “master” substitute “the original master”, and |
| |
(c) | for second “master” substitute “original master”. |
| |
(4) | In sub-paragraph (2)(d) for “substitution for section 40A(5)” substitute |
| 20 |
“insertion after section 40A(4)”. |
| |
(5) | In sub-paragraph (2)(e)— |
| |
(a) | for first “master” substitute “original master”, |
| |
(b) | for ““film,” substitute ““a film,”, and |
| |
(c) | for second “master” substitute “the original master”. |
| 25 |
(6) | In sub-paragraph (2)(f) to (i) for “master” in each place substitute “original |
| |
| |
(7) | In sub-paragraph (2)(j) for the words from first “for” to the end substitute |
| |
“for “original master versions of films”, of “a film, tape or disc” for “the |
| |
original master version of a film” and of “film, tape or disc” for “original |
| 30 |
master version” (in both places);”. |
| |
(8) | In sub-paragraph (2)(k) to (m) for “master” in each place substitute “original |
| |
| |
(9) | In sub-paragraph (2)(n)— |
| |
(a) | for ““film,” substitute ““a film,”, and |
| 35 |
(b) | for “master” substitute “the original master”. |
| |
| |
28 | Section 99 of FA 2002 (restriction of relief to films genuinely intended for |
| |
theatrical release) in subsection (3) for “master version of the film” substitute |
| |
“original master version of the film (within the meaning given by section 43 |
| 40 |
of the Finance (No.2) Act 1992)”. |
| |
|
| |
|
| |
|
29 | In Schedule 29 to that Act (gains and losses of a company from intangible |
| |
fixed assets), in paragraph 80(2)(a) for “has the meaning” to “films)” |
| |
substitute “means an original master version of the film (within the meaning |
| |
given by section 43 of the Finance (No.2) Act 1992)”. |
| |
Income Tax (Trading and Other Income) Act 2005 |
| 5 |
30 (1) | ITTOIA 2005 is amended as follows. |
| |
(2) | In section 139 (certified master versions: production expenditure on limited- |
| |
budget films), in subsection (1), after paragraph (a) insert— |
| |
“(aa) | the film was completed in, or before, that period,”. |
| |
(3) | In section 140 (certified master version: acquisition expenditure on limited- |
| 10 |
budget films), in subsection (1), after paragraph (a) insert— |
| |
“(aa) | the film was completed in, or before, that period,”. |
| |
(4) | In Schedule 2 (transitionals and savings etc), in paragraph 34 for “Section 138 |
| |
does” substitute “Sections 138 and 138A do”. |
| |
Commencement of Part 3 amendments |
| 15 |
31 (1) | The amendment made by paragraph 21(3), so far as it relates to section |
| |
40D(4) of F(No.2)A 1992 as amended by Schedule 1 to ITTOIA 2005, has |
| |
effect for accounting periods ending after 5th April 2005. |
| |
(2) | The amendments made by paragraphs 25 and 30 have effect for the year |
| |
2005-06 and subsequent years of assessment. |
| 20 |
(3) | The amendments made by the remaining provisions of this Part of this |
| |
Schedule are deemed to have come into force on 2nd December 2004. |
| |
| |
| |
Meaning of “pre-announcement expenditure” |
| 25 |
32 (1) | For the purposes of this Schedule “pre-announcement expenditure” means |
| |
| |
(a) | before 2nd December 2004, or |
| |
(b) | on or after that date in pursuance of an obligation to incur the |
| |
expenditure which immediately before that date was an |
| 30 |
unconditional obligation. |
| |
(2) | In determining, for the purposes of sub-paragraph (1), whether an |
| |
obligation in pursuance of which expenditure was incurred was an |
| |
unconditional obligation immediately before 2nd December 2004, the |
| |
obligation is not to be regarded as a conditional obligation at that time by |
| 35 |
reason only that it was contingent on one or more of the following |
| |
| |
(a) | a condition the fulfilment of which was outside the control of the |
| |
person by whom the expenditure was incurred; |
| |
(b) | a condition that the original master version of the film concerned is |
| 40 |
certified under Schedule 1 to the Films Act 1985 (c. 21) as a qualifying |
| |
film, tape or disc for the purposes of section 40D of F(No.2)A 1992. |
| |
|
| |
|
| |
|
(3) | For the purposes of this Schedule— |
| |
(a) | a claim under section 42 of F(No.2)A 1992 in respect of expenditure |
| |
incurred on the production or acquisition of the original master |
| |
version of a film is a “claim in respect of pre-announcement |
| |
expenditure only” if, and only if, all of the expenditure incurred by |
| 5 |
the claimant on the production or, as the case may be, acquisition of |
| |
that version is pre-announcement expenditure, and |
| |
(b) | a deduction under any of sections 138 to 140 of ITTOIA 2005 in |
| |
respect of expenditure incurred on the production or acquisition of |
| |
the original master version of a film is a “deduction in respect of pre- |
| 10 |
announcement expenditure only” if, and only if, all of the |
| |
expenditure within subsection (1)(a) of the section under which the |
| |
deduction is made is pre-announcement expenditure. |
| |
Meaning of film “in production” |
| |
33 (1) | For the purposes of this Schedule a film was “in production” on 2nd |
| 15 |
| |
(a) | had its first day of principal photography before that date, and |
| |
(b) | was completed on or after that date. |
| |
(2) | For this purpose a film is completed when it is first in a form in which it can |
| |
reasonably be regarded as ready for copies of it to be made and distributed |
| 20 |
for presentation to the general public. |
| |
Meaning of “film” and “original master version” |
| |
34 | For the purposes of this Schedule— |
| |
“film” is to be construed in accordance with paragraph 1 of Schedule 1 |
| |
to the Films Act 1985 (c. 21); |
| 25 |
“original master version” is to be construed in accordance with section |
| |
| |
| |
| |
| |
| 30 |
| |
1 | For the purposes of section 104 a scheme is a qualifying scheme if it falls |
| |
within any of the following Parts of this Schedule. |
| |
| |
Schemes involving hybrid entities |
| 35 |
2 | A scheme falls within this Part if a party to a transaction forming part of the |
| |
scheme is a hybrid entity. |
| |
3 (1) | An entity is a hybrid entity if— |
| |
|
| |
|
| |
|
(a) | the entity is liable to a relevant tax imposed under the law of any |
| |
| |
(b) | for the purposes of that relevant tax or any other relevant tax, the |
| |
entity’s profits or gains are treated as the profits or gains of a person |
| |
or persons other than the entity. |
| 5 |
(2) | For the purposes of this paragraph, the following are relevant taxes— |
| |
| |
| |
(c) | any tax of a similar character to income tax or corporation tax that is |
| |
imposed by the law of a territory other than the United Kingdom. |
| 10 |
| |
Schemes involving hybrid effect |
| |
Schemes involving hybrid effect |
| |
4 | A scheme falls within this Part if it satisfies the requirements of paragraph 5, |
| |
| 15 |
Instruments of alterable character |
| |
5 (1) | A scheme satisfies the requirements of this paragraph if one of the parties to |
| |
the scheme is party to an instrument falling within sub-paragraph (2). |
| |
(2) | An instrument falls within this sub-paragraph if, under the law of a |
| |
particular territory, a relevant characteristic of the instrument may be |
| 20 |
altered on the election of any party to the instrument. |
| |
(3) | For the purposes of this paragraph a characteristic of an instrument is a |
| |
relevant characteristic if, under the law of a particular territory, altering it |
| |
has the effect of determining whether, for the tax purposes of that territory— |
| |
(a) | the instrument is taken into account as giving rise to income, |
| 25 |
(b) | the instrument is taken into account as giving rise to capital, or |
| |
(c) | the instrument does not fall to be taken into account as giving rise |
| |
either to income or to capital. |
| |
(4) | An instrument is taken into account as giving rise to capital if any gain on |
| |
the disposal of the instrument would, or would if the person making the |
| 30 |
disposal were resident in the United Kingdom, be a chargeable gain. |
| |
Shares subject to conversion |
| |
6 (1) | A scheme satisfies the requirements of this paragraph if it includes— |
| |
(a) | the issuing by a company of shares subject to conversion, or |
| |
(b) | the amendment of rights attaching to shares issued by a company |
| 35 |
such that the shares become shares subject to conversion. |
| |
(2) | For the purposes of sub-paragraph (1) a company’s shares are shares subject |
| |
| |
(a) | the rights attached to the shares include provision by virtue of which |
| |
a holder of such shares is entitled, on the occurrence of an event, to |
| 40 |
acquire by conversion or exchange securities in the company or |
| |
| |
|
| |
|