Finance Leasing Manual - FLM35.24

Allowances for costs of acquiring master negatives of films

Paragraph 11(10) Schedule 12 FA 1997 ensures that a major lump sum in respect of the lease of a film qualifying for revenue deductions under S68 CAA 1990, Section 41 or S42 F(No 2)A 1992 is treated as a revenue receipt of the business (see IM 3303). This is to the extent that such treatment is not already required by S68(8) CAA 1990 for example where the major lump sum is received by a connected person of the lessor. Since ordinary film disposal proceeds are not restricted to cost there is no equivalent restriction of the amount of the major lump sum to be taken into account as a revenue receipt of the business.