Corporation Tax Act 2009 section 1218ZCG

Qualifying expenditure

Section 1218ZCG defines what counts as "qualifying expenditure" for the purposes of museums and galleries exhibition tax relief, including restrictions on expenditure that already qualifies for relief elsewhere and rules to prevent connected party profit from inflating claims.

• Qualifying expenditure is core expenditure on an exhibition production that is used in calculating the profit or loss of the separate exhibition trade for tax purposes and is not otherwise relievable under another tax relief regime
• Expenditure that already qualifies for relief under other creative industry schemes (such as film, television, video games, theatre or orchestra tax relief) or under the research and development relief provisions cannot also be treated as qualifying expenditure for exhibition tax relief
• Any element of a payment to a connected party that represents connected party profit is excluded from qualifying expenditure, unless the transaction was carried out on arm's length terms — and where there is a chain of connected party transactions, the profit element is measured against the cost incurred by the first supplier in the chain
• The Treasury has the power to amend by regulations the deadline date by which qualifying expenditure must be incurred