Corporation Tax Act 2009 section 1217DB

Use of losses in later periods

Section 1217DB sets out how trading losses from a video games development trade can be used once the qualifying video game has been completed or abandoned, including restrictions on losses attributable to video games tax relief.

• The rules apply from the accounting period in which a qualifying video game is completed or abandoned, and to any subsequent periods while the trade continues.
• Trading losses carried forward from earlier (pre-completion) periods can generally be treated as losses of the period into which they are carried, but sideways relief and group relief are restricted to the portion not attributable to video games tax relief.
• The portion of a loss attributable to video games tax relief is calculated as the total loss minus the loss that would have existed without the additional deduction available under the video games tax relief rules.
• These restrictions do not apply to terminal losses, which are dealt with separately under section 1217DC.