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FA06/S46 & S47

FA06/S46 and FA06/S47 remove, respectively, the previous corporation and income tax reliefs for film production and acquisition:

• FA06/S46 and FA06/S47 (1)(a) and (1)(b)(i) disapply F2A92/S40A, F2A92/S40B, F2A92/S40C , F2A92/S40D and ITTOIA2005/S134 and ITTOIA2005/S135 â€� which deem expenditure on production or acquisition of the original master version of a film to be revenue, not capital, specify how the expenditure is to be allocated to periods, and allow British films to elect out of this treatment â€� for films which commence principal photography on or after 1 January 2007
• FA06/S46 and FA06/S47 (1)(b)(ii) further disapply F2A92/S40A, F2A92/S40B, F2A92/S40C , F2A92/S40D and ITTOIA2005/S134 and ITTOIA2005/S135, for any acquisition expenditure incurred on or after 1 October 2007;
• FA06/S46(2) and FA06/S47(2) disapply the relief for preliminary expenditure on film production, in F2A92/S41 and ITTOIA2005/S137, for expenditure incurred after 19 July 2006;
• FA06/S46 and FA06/S47 (3)(a) and (3)(b)(i) disapply the relief for expenditure on film production or acquisition, in F2A92/S42, F2A97/S48 and ITTOIA2005/S138-144, for films which commence principal photography on or after 1 January 2007; and,
• FA06/S46 and FA06/S47 (3)(b)(ii) disapply the relief for expenditure on film acquisition, in F2A92/S42, F2A97/S48 and ITTOIA2005/S138-144, for any acquisition expenditure incurred on or after 1 October 2007.

FA06/S51amends FA02/SCH29, the regime for the taxation of gains and losses from intangible fixed assets (“the IP regime�), from which films are currently excluded, so that the exclusion only applies to production expenditure.