Section CU 19 — Income Tax Act 2007: Amount treated as repayment for purposes of section CU 17: net income

CU 19 Amount treated as repayment for purposes of section CU 17: net income When this section applies (1) This section applies when— (a) a holding company of a mining company is allowed, under section DU 12 (Amount written off by holding company) or an earlier Act, a deduction for an amount it has written off a loan it made to the mining company; and (b) the deduction is allocated to an income year; and (c) the mining company would have had net income in a tax year after the tax year that corresponds to the income year referred to in paragraph (b) (the later tax year ) if— (i) the situation described in subsection (2) had existed; and (ii) the situation described in subsection (3) had existed. First situation (2) The first situation is that in the later tax year no person is allowed a deduction for the mining company’s mining exploration expenditure or mining development expenditure. Second situation (3) The second situation is that in the later tax year the mining company disposes of an asset in circumstances to which section CU 3 or CZ 2(1)(b) (Mining company’s 1970–71 tax year) applies and the amount received or receivable for the asset is the amount determined under subsection (4) or (5). Amount for which asset disposed of: most cases (4) If any of section CU 3(3)(a), (4), or (5) applies to the disposal of the asset, the amount is the consideration determined under whichever one of the provisions applies. Amount for which asset disposed of: election of section CU 3(7) (5) If section CU 3(7) applies to the disposal of the asset, the amount is the greater of the following up to the limit of the market value that the asset has on the date of disposal: (a) the part of the amount specified in the notice under section CU 3(7) that is in cash, which may be zero; and (b) the total amount of loans made on or before the date of disposal by all holding companies of the mining company to the mining company to the extent to which the loans— (i) relate to the asset, including a part not disposed of; and (ii) have been written off and allowed as a deduction under section DU 12 (Amount written off by holding company) or an earlier Act; and (iii) have not been repaid, and have not been treated as repaid under this section or section CU 18 or an earlier Act, on or before the date of disposal. Asset (6) For the purposes of subsections (3) to (5),— (a) a reference to an asset means the part of the asset that is disposed of, which may be some of it or all of it, and a reference to an amount received or receivable for an asset means the amount for the part that is disposed of: (b) a reference to an asset includes a reference to a share or interest in the asset: (c) [Repealed] (d) every member of any other association of persons who receive income jointly or carry on activities jointly has a share or interest in each asset of the association that is the same as the member’s interest in the totality of the assets of the association. Amount of net income (7) For the purposes of section CU 17 , the prescribed proportion of the amount that would have been the net income of the mining company is treated as repayment by the mining company of the amount written off. The repayment is treated as having been made on the day following the end of the income year in which the mining company would have had net income. Defined in this Act: amount , deduction , holding company , income , income year , loan , mining company , mining development expenditure , mining exploration expenditure , net income , notice , pay , prescribed proportion , tax year , Compare: 2004 No 35 s CU 19 Section CU 19(6)(c): repealed, on 1 April 2008, by section 7(1) of the Taxation (Limited Partnerships) Act 2008 (2008 No 2).