Corporation Tax Act 2009 section 1216DA

Restriction on use of losses while programme in production

Section 1216DA restricts how losses arising in a separate programme trade during the production phase can be used, limiting them to carry forward against future profits of that same trade.

• Losses incurred in a separate programme trade before the programme is completed cannot be used to reduce taxable income generally.
• The only permitted use of such losses is to carry them forward and set them against profits of the same separate programme trade in a subsequent period.
• Where losses are carried forward and deducted from profits in the next period, they are excluded from the corporate loss restriction rules that would otherwise cap the amount of losses that can be deducted.
• This ensures that tax relief for production losses is deferred until the programme generates income, rather than being used against other profits of the company.