Section CU 16 — Income Tax Act 2007: Recovery of reinvestment profit on repayment of loans

CU 16 Recovery of reinvestment profit on repayment of loans When this section applies (1) This section applies when— (a) a company (the lender company ) makes a loan to a mining company or a mining holding company; and (b) the loan is made wholly or partly out of the lender company’s reinvestment profit; and (c) the loan is wholly or partly repaid. Income (2) The amount calculated using the formula in subsection (3) is income of the lender company. Formula (3) The formula is— reinvestment profit amount × repayment. loan amount Definition of items in formula (4) In the formula,— (a) reinvestment profit amount is the amount of the loan made out of the lender company’s reinvestment profit: (b) loan amount is the amount of the loan: (c) repayment is the amount repaid. Timing of income (5) The income is allocated to the income year in which the repayment is made. Relationship with section CX 46 (6) This section is overridden by section CX 46 (Repayment of loans made from reinvestment profit). Defined in this Act: amount , company , income , income year , mining company , mining holding company , pay , reinvestment profit , Compare: 2004 No 35 s CU 16