B5.508 Film-related trading losses for pre 2006 regime
Anti-avoidance measures1 counter schemes, used by individuals who benefited from the now repealed film tax reliefs (B5.501, B5.502 — which now only applies to sound recordings) 2, which seek to convert a tax deferral into a permanent tax gain.
These measures continue to apply3 to any individual who claimed sideways relief or capital gains relief (see B8.202, B8.206) in respect of losses arising from such a trade.
They raise a charge to income tax where there is a disposal, after 10 December 2003, of an individual's rights to profits from the trade, and where that disposal is accompanied by the individual either receiving non-taxable consideration, or the amount of his losses claimed becoming greater than his net contribution to the trade. Although there are likely to be very few instances of these provisions now applying, given that the reliefs themselves have long been repealed, they are covered here for the sake of completeness.
Charge to tax
An individual is treated as receiving taxable income every time a chargeable event arises where4:
• an individual makes a claim in respect of a film-related loss sustained by him in a trade carried on solely or in partnership (a relevant claim)
• there is a disposal on or after 10 December 2003 of a right of the individual to profits arising from the trade (a relevant disposal), or an exit event occurs also on or after 10 December 2003
The chargeable income is an amount equal to the sum