(2)The loss is not available for loss relief except to the extent that it may be carried forward under [F1section 45 of CTA 2010] to be set against profits of the separate film trade in a subsequent period.

(2)Subsection (3) applies if a loss made in the separate film trade is carried forward under [F2section 45 of CTA 2010] from a pre-completion period to a relevant later period.

(3)So much (if any) of the loss as is not attributable to film tax relief (see subsection (6)) may be treated for the purposes of loss relief as if it were a loss made in the period to which it is carried forward.

(4)Subsection (5) applies if in a relevant later period a loss is made in the separate film trade.

(5)The amount of the loss that may be—

(a)[F3deducted from total] profits of the same or an earlier period under [F4section 37 of CTA 2010], or

(b)surrendered as group relief under [F5Part 5] of that Act,

is restricted to the amount (if any) that is not attributable to film tax relief (see subsection (6)).

(6)The amount of a loss in any period that is attributable to film tax relief is calculated by deducting from the total amount of the loss the amount there would have been if there had been no additional deduction under Chapter 3 in that or any earlier period.

(7)This section does not apply to a loss to the extent that it is carried forward or surrendered under section 1211.

(c)if company A had not ceased to carry on trade X, it could have carried forward an amount under [F6section 45 of CTA 2010] to be set against profits of trade X in a later period (“the terminal loss”).

(2)If on cessation of trade X company A—

(a)is the film production company in relation to another qualifying film, and

(b)is carrying on its separate trade in relation to that film (“trade Y”),

it may (on making a claim) make an election under subsection (3).

(3)The election is to have the terminal loss (or a part of it) treated as if it were a loss brought forward under [F7section 45 of CTA 2010] to be set against the profits of trade Y of the first accounting period beginning after the cessation and so on.

(4)Subsection (5) applies if on cessation of trade X—

(a)there is another company (“company B”) that is the film production company in relation to a qualifying film,

(b)company B is carrying on its separate trade in relation to that film (“trade Z”), and

(c)company B is in the same group as company A for the purposes of [F8Part 5 of CTA 2010] (group relief).

(5)Company A may surrender the terminal loss (or a part of it) to company B.

(6)On the making of a claim by company B the amount surrendered is treated as if it were a loss brought forward by company B under [F9section 45 of CTA 2010] to be set against the profits of trade Z of the first accounting period beginning after the cessation and so on.

(7)The Treasury may, in relation to the surrender of a loss under subsection (5) and the resulting claim under subsection (6), make provision by regulations corresponding, subject to such adaptations or other modifications as appear to them to be appropriate, to that made by Part 8 of Schedule 18 to FA 1998 (company tax returns: claims for group relief).

(8)“Qualifying film” means a film in relation to which the conditions for film tax relief are met (see section 1195(2)).