Section CX 45 — Income Tax Act 2007: Disposal of mining shares acquired with reinvestment profit

CX 45 Disposal of mining shares acquired with reinvestment profit When subsection (2) applies (1) Subsection (2) applies when— (a) a company derives an amount from disposing of a mining share; and (b) an amount of the reinvestment profit of the company is used in calculating the deduction for the cost of the mining share under section DU 11(2) (Disposal of mining shares by company); and (c) some or all of the amount derived from the disposal would, in the absence of this section, be income of the company under section CU 14 (Recovery of reinvestment profit on disposal of mining shares). Excluded income (2) The amount that would be income is excluded income of the company to the extent to which it is, or is to be, used for mining purposes in the prescribed period. When subsection (4) applies (3) Subsection (4) applies when— (a) a company (the seller ) derives an amount from disposing of a mining share; and (b) the disposal is to a mining company or to a mining holding company (the buyer ); and (c) an amount of the reinvestment profit of the seller is used in calculating the deduction for the cost of the mining share under section DU 11(2) ; and (d) some or all of the amount derived from the disposal would, in the absence of this section, be income of the seller under section CU 14 . Excluded income (4) The amount that would be income is excluded income of the seller to the extent to which it consists of mining shares issued to it in the buyer. When subsection (6) applies (5) Subsection (6) applies when— (a) a company derives an amount from disposing of a mining share; and (b) the disposal is of the kind described in section CU 20 (Mining company or mining holding company liquidated); and (c) an amount of the reinvestment profit of the company is used in calculating the deduction for the cost of the mining share under section DU 11(2) ; and (d) some or all of the amount derived from the disposal would, in the absence of this section, be income of the company under section CU 14 . Excluded income (6) The amount that would be income is excluded income of the company to the extent to which it consists of mining shares. Defined in this Act: amount , company , deduction , excluded income , income , mining company , mining holding company , mining purposes , mining share , prescribed period , reinvestment profit Compare: 2004 No 35 s CX 39