What are terminal losses under Corporation Tax Act 2009 section 1216DC?

Terminal losses arise when a television production company ceases its separate trade for a qualifying programme and still has unused trading losses to carry forward. These leftover losses are classified as terminal losses under section 1216DC, allowing the company specific routes to obtain relief rather than the losses going to waste.

Can a television production company transfer its terminal loss to another of its own qualifying programme trades?

Yes. If the company carries on another separate trade relating to a different qualifying programme, it can elect to treat the terminal loss as a loss brought forward into the accounting period immediately following the cessation. This provides a practical route to offset the loss against future profits from that other programme trade.

How can terminal losses be surrendered within a group under section 1216DC?

Where the company with the terminal loss is part of a group, it may surrender that loss to another group company that is a television production company for a different qualifying programme. The receiving company must make a claim, and it can then set the surrendered amount against the profits of its own programme trade.

Does HM Treasury have any regulatory power over terminal loss rules for television production companies?

Yes. HM Treasury has the power to make regulations adapting or modifying the terminal loss rules under section 1216DC as it considers appropriate. This ensures the provisions can be updated to reflect changes in the television tax relief regime without requiring primary legislation.

Corporation Tax Act 2009 section 1216DC

Terminal losses

Section 1216DC deals with what happens to unused trading losses when a television production company stops carrying on its separate trade in relation to a qualifying programme, and how those terminal losses can be used elsewhere.

When a TV production company ceases its separate trade for a qualifying programme and has losses still to carry forward, these are treated as "terminal losses"
If the company carries on another trade relating to a different qualifying programme, it can elect to treat the terminal loss as a loss brought forward into the next accounting period after the cessation
If the company is part of a group, it may surrender its terminal loss to another group company that is a television production company for a different qualifying programme, provided that company claims the loss
HM Treasury has the power to make regulations adapting or modifying these terminal loss rules as it considers appropriate

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