Section CX 48 — Income Tax Act 2007: Amounts remitted as condition of new start grant

CX 48 Amounts remitted as condition of new start grant When this section applies (1) This section applies when in an income year of a person— (a) the person carries on a business of— (i) animal husbandry: (ii) poultry-keeping: (iii) beekeeping: (iv) breeding horses other than bloodstock: (v) horticulture: (vi) cropping; and (b) the person is paid a new start grant for the business for an event that is declared to be an emergency event; and (c) the person in carrying on the business— (i) incurs a liability for expenditure or loss before the declaration of the emergency event; and (ii) before the date that is 3 months after the end of the period for which the declaration applies, takes the liability into account in calculating the person’s taxable income for an income year; and (d) the liability referred to in paragraph (c)(i) is forgiven or otherwise remitted— (i) as a prerequisite for the payment of the new start grant; and (ii) before the date that is 18 months after the end of the period for which the declaration applies; and (e) the amount of the remitted liability is income of the person under section CG 2 (Remitted amounts). Excluded income (2) The remitted liability is excluded income of the person to the extent to which it is the greater of zero and the amount calculated using the formula— remitted amount − current loss − loss balance − other loss. Definition of items in formula (3) In the formula,— (a) remitted amount is the amount of the remitted liability: (b) current loss is the net loss that the person would have for the income year in which the liability is remitted in the absence of this section: (c) loss balance is the loss balance that is available to the person for offset against net income for the income year in which the liability is remitted: (d) other loss is a loss that— (i) is incurred by a person associated with the person who receives the new start grant; and (ii) meets the requirements of subsection (4). Loss incurred by associated person from business or land (4) The loss referred to in subsection (3)(d)— (a) is incurred by a person who— (i) carries on or has carried on the business for which the new start grant is paid or owns or has owned an estate in fee simple or leasehold estate in land used in the business; and (ii) in the opinion of the Commissioner, is under a substantial degree of control by the person; and (iii) in the opinion of the Commissioner, has a substantial identity of interests with the person; and (b) is incurred from— (i) the business referred to in paragraph (a)(i): (ii) land that is used in the business; and (c) is, for the income year in which the liability is remitted,— (i) a tax loss component of the associated person: (ii) a loss balance for the associated person; and (d) is included in the calculation in subsection (3) to the extent determined by the Commissioner, having regard to the interests of the associated person that are separate from those of the person. Notice to associated person (5) The Commissioner must give to the associated person notice of a determination under subsection (4)(d). Defined in this Act: business , capital limitation , deduction , diminished value , emergency event , general limitation , general permission , income , income year , new start grant , notice , pay Compare: 2004 No 35 s CX 41B Section CX 48(1): substituted, on 6 October 2009, by section 57(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CX 48 list of defined terms emergency event : inserted, on 6 October 2009, by section 57(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CX 48 list of defined terms qualifying event : repealed, on 6 October 2009, by section 57(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).