Income Tax Act 2007 section 115

Restrictions on reliefs for firms exploiting films

Section 115 restricts the loss reliefs available to certain partners in film exploitation partnerships who are not actively involved in the trade and who have guaranteed income arrangements in place.

• Partners in film exploitation trades who are not devoting significant time to the business, and who have a guaranteed income agreement, cannot use sideways relief or capital gains relief for their losses in the first four tax years of the trade
• Sideways relief is only permitted against profits from the same film trade — it cannot be set against the individual's other income or capital gains
• These restrictions do not apply to any part of the loss that derives from qualifying film expenditure
• A "relevant agreement" includes any agreement made in connection with the individual's participation in the trade that is designed to secure a guaranteed amount of income, regardless of when that income is received or whether the individual must contribute funds to the trade