CREC045000 - Losses: transfer of trade

Sections 940A-953 CTA 2010Ìý

»Ê¹ÚÌåÓýapp rules on transfers of trades in CTA 2010 do not apply to transfers of separate production trades between companies in common ownership.Ìý

»Ê¹ÚÌåÓýapp legislation in CTA 2010 prevents the trade from being treated as permanently discontinuedÌýin 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 toÌýthe trade of the first company.Ìý

»Ê¹ÚÌåÓýapp AVEC and VGEC legislation in PartÌý14A CTA 2009Ìýpermits only one company to be the production companyÌýin relation to a film, TV programmeÌýor video gameÌýand treats the activities of that company in relation to each productionÌýas a separate trade.Ìý

As a result, once a productionÌýtrade has commencedÌýit is impossible for a second company to succeed toÌýthe trade in relation to the production. »Ê¹ÚÌåÓýapp rules in CTA 2010 do not apply.Ìý

Where a production company carries on a trade in relation to a qualifying productionÌýand that trade ceases, it may be able to pass any losses on to:Ìý

  • another trade in relation to a qualifying productionÌýthat it is carrying on at the time of the cessation, orÌý

  • another trade in relation to a qualifying productionÌýthat another group company is carrying on at the time of the cessation.Ìý

See CREC043000Ìýfor details.Ìý