Income Tax (Trading and Other Income) Act 2005 section 134

Expenditure treated as revenue in nature

Section 134 provides that expenditure on producing or acquiring a film or sound recording, and any proceeds from disposing of the original master version, are treated as revenue rather than capital for income tax purposes.

• Production or acquisition expenditure incurred by a person carrying on a trade is treated as revenue expenditure for income tax purposes, rather than capital expenditure
• Any sums received from disposing of the original master version are likewise treated as revenue receipts and brought into account in the profits of the relevant period in which they are received
• Disposal proceeds include sums from selling any interest or right in or over the original master version, as well as insurance, compensation or similar money derived from it
• The trader may elect under section 143 for this revenue treatment not to apply, in which case normal capital allowances rules would apply instead