Corporation Tax Act 2009 section 151

Allocation of expenditure

Section 151 sets out how a company must spread (allocate) the revenue expenditure it incurs on producing or acquiring an original master version of a sound recording across the periods in which that master generates value.

• Revenue expenditure on producing or acquiring an original master sound recording must be allocated across relevant periods on a just and reasonable basis, rather than deducted in full when incurred
• The allocation takes into account the unallocated expenditure at the start of each period, the proportion of the master's value realised in that period relative to total expected value, and the need to write off all expenditure over the master's useful life
• A company may allocate an additional amount in any period, provided the total allocated does not exceed the value actually realised from the master in that period
• These rules apply only where the master recording is not treated as trading stock of the trade