Income Tax Act 2007 section 116

Exclusion from restrictions under section 115: certain film expenditure

Section 116 provides an exemption from the sideways loss relief restrictions in section 115 where the loss arises from qualifying film expenditure.

• Losses derived from unrestricted film expenditure are excluded from the capital allowances restriction in section 115.
• This means that where a loss qualifying for sideways relief arises from certain qualifying film-related spending, the normal cap on relief does not apply to that portion of the loss.
• The exemption applies only to the extent that the loss derives from unrestricted film expenditure — any remaining portion of the loss may still be subject to the section 115 restriction.
• The provision originates from sections 118ZL and 118ZM of the Income and Corporation Taxes Act 1988 and was amended by the Finance Act 2007.