MGETR50045 | Museums and Galleries Exhibition Tax Relief: qualifying exhibitions: minimum expenditure condition - transition rules

For accounting periods ending on or after 1 April 2024, the European expenditure condition is replaced by the UK expenditure condition.

This means that the previous requirement for at least 25% of a production’s core expenditure to be European expenditure no longer applies. It is replaced by a requirement that at least 10% of a production’s core expenditure is UK expenditure.

UK expenditure is defined as: ‘expenditure on goods and services which are used or consumed in the United Kingdom’.

This change does not apply to a production if

• it has entered the production phase before 1 April 2024, and

• the separate trade in respect of the production ceases before 1 April 2025.

The European expenditure condition applies to these productions throughout.

If

• a production begins before 1 April 2024 but the separate trade does not cease before 1 April 2025, and

• the European expenditure condition is met in respect of core expenditure incurred before 1 April 2025

then the production will not lose its entitlement to relief on expenditure incurred before 1 April 2025 in the event that it later fails the UK expenditure condition.

The production company’s tax return for the first accounting period which ends on or after 1 April 2025 should include a statement of how much of core expenditure incurred before 1 April 2025 is European expenditure, to show whether the European expenditure condition was met at that date.