CREC045000 - Losses: transfer of trade
Sections 940A-953 CTA 2010听
The rules on transfers of trades in CTA 2010 do not apply to transfers of separate production trades between companies in common ownership.听
The legislation in CTA 2010 prevents the trade from being treated as permanently discontinued听in the hands of the first company and a new trade starting in the hands of the second company. Instead, the second company is treated as succeeding to听the trade of the first company.听
The AVEC and VGEC legislation in Part听14A CTA 2009听permits only one company to be the production company听in relation to a film, TV programme听or video game听and treats the activities of that company in relation to each production听as a separate trade.听
As a result, once a production听trade has commenced听it is impossible for a second company to succeed to听the trade in relation to the production. The rules in CTA 2010 do not apply.听
Where a production company carries on a trade in relation to a qualifying production听and that trade ceases, it may be able to pass any losses on to:听
another trade in relation to a qualifying production听that it is carrying on at the time of the cessation, or听
another trade in relation to a qualifying production听that another group company is carrying on at the time of the cessation.听
See CREC043000听for details.听