Paragraph 70 of the Statement of Practice states that 'where a film is sold prior to general public release for a sum equal to production expenditure ... the Revenue will not seek to challenge the price ... This also applies where there is a pre-release agreement and the sale takes place within three months of release'. So, in most cases, the S&L must take place prior to release. However, it is also open for a partnership/lessor to purchase a film on the basis of a valuation, i.e., without relying on the provisions of paragraph 70. A valuation may be carried out, i.e., valuing unsold territories over the period of the lease term (i.e., 15 years). Provided the film qualifies as a British film under the Films Act and the valuation is carried out by a professional valuer acceptable to the partnership, utilizing an appropriate methodology, catalogue material produced after 2 July 1997 could be re-financed in this way.
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