An income tax charge is imposed in certain circumstances on an individual who has claimed film-related losses. Three key conditions need to be met if the charge is to be imposed:

(1)First, these provisions only apply where one of the following types of relief is claimed for a film-related loss (as defined below):

(a)sideways relief (defined at ¶290-995); or

(b)capital gains relief (defined at ¶290-995).

The term ‘relevant claim’ is given to such a claim.

(2)The second condition is that there is a disposal (a ‘relevant disposal’) of the individual’s right to trading profits.

(3)Thirdly, an exit event must occur.

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