Section 1217MC — Finance Act 2014: Terminal losses

Terminal losses 1217MC 1 This section applies if—

a the company ceases to carry on the separate theatrical trade, and b if the company had not ceased to carry on the separate theatrical trade, it could have carried forward an amount under section 45 of CTA 2010 to be set against profits of that trade in a later period (“the terminal loss”). Below in this section the company is referred to as “ company A ” and the separate theatrical trade is referred to as “ trade 1 ”.

2 If company A—

a is treated under section 1217H(3) as carrying on a separate theatrical trade in relation to another theatrical production (“trade 2”),

and b is carrying on trade 2 when it ceases to carry on trade 1, company A may (on making a claim) elect to transfer the terminal loss (or a part of it) to trade 2.

3 If company A makes an election under subsection (2), the terminal loss (or part of the loss) is treated as if it were a loss brought forward under section 45 of CTA 2010 to be set against the profits of trade 2 of the first accounting period beginning after the cessation and so on.

4 Subsection (5) applies if—

a another company (“company B”) is treated under section 1217H(3) as carrying on a separate theatrical trade (“company B's trade”) in relation to another theatrical production, b company B is carrying on that trade when company A ceases to carry on trade 1, and c company B is in the same group as company A for the purposes of Part 5 of CTA 2010 (group relief).

5 Company A may surrender the loss (or part of it) to company B.

6 On the making of a claim by company B the amount surrendered is treated as if it were a loss brought forward by company B under section 45 of CTA 2010 to be set against the profits of company B's trade of the first accounting period beginning after the cessation and so on.

7 The Treasury may by regulations make administrative provision in relation to the surrender of a loss under subsection (5) and the resulting claim under subsection (6). 8 “ Administrative provision ” means provision corresponding, subject to such adaptations or other modifications as appear to the Treasury to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).