Corporation Tax Act 2009 section 1205

Artificially inflated claims for additional deduction or film tax credit

Section 1205 deals with transactions that are entered into as part of arrangements whose sole or main purpose is to artificially inflate a company's entitlement to film tax relief, whether in the form of an additional deduction or a film tax credit.

• Transactions connected to arrangements designed mainly to inflate film tax relief claims must be disregarded
• The rule applies to both additional deductions and film tax credits
• The test is whether the sole or main purpose of the arrangements is to obtain or increase the relief
• Where the rule applies, the transaction is ignored when calculating the company's entitlement to relief