Extra Statutory Concession A94 withdrawal – Theatre Angels

 

Withdrawn from 31 March 2017

 

With effect from 31 March 2017, the extra statutory concession (A94) is to be withdrawn and the way that Theatre Angels are taxed will alter.

 

 

In summary:

 

• Profits on productions will be subject to Corporation Tax before distributions are made. Corporation tax is currently 20%, this will be reduced in stages to 17% for the tax year starting 1 April 2020.

   

• Profits payable to UK limited company investors will not be subject to Corporation Tax before distribution.

   

• ‘Grandfathering’ arrangements are in place, for shows that opened prior to 1 April 2017, the old treatment with regard to distributions can be maintained until 31 March 2019.

   

• For the above arrangement to be effective, HMRC must be informed prior to 31 December 2016.

   

   

• For individual investors, the only relief available for losses on production investments will be against future capital gains.

   

• The losses on production investments can be carried forward indefinitely.

   

• Distributions to individuals will be treated by the individual in a similar way to dividend income.

   

• Overseas investors need to seek advice with someone who specialises in tax in their own country.

   

• For an individual who invests regularly in theatre production, it would be worth considering forming a limited company to make the investments. Professional advice should be sought.

 

Graham Berry FCCA – November 2016

 

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