Section EZ 61 — Income Tax Act 2007: Allowance for cancelled amount: spreading

EZ 61 Allowance for cancelled amount: spreading Policyholder base allowable deduction (1) For an income year that includes 1 July 2010 and later income years, a life insurer may choose, by a notice received by the Commissioner on or before the last day for furnishing a return of income for the relevant income year or within such further time as the Commissioner may allow, that an amount (the deduction amount ) is included as their policyholder base allowable deduction for the income year, if–– (a) the life insurer has no taxable income, other than in relation to its policyholder base, for the tax year corresponding to the income year, and no taxable income, other than in relation to its policyholder base, for every earlier tax year going back to, and including, the tax year that corresponds with the income year that includes 1 July 2010; and (b) the deduction amount is stated in the notice and it is equal to or less than the least of the following: (i) the available tax loss for the tax year that corresponds with the income year, before applying this section; and (ii) the available concession amount for the income year, described in subsection (2); and (iii) the amount that would be the life insurer's schedular policyholder base income for the income year, before applying this section for the year. Available concession amount (2) For the purposes of subsection (1), the available concession amount for the income year is a positive amount calculated using the formula— base concession amount − used. Definition of items in formula (3) In the formula,— (a) base concession amount is the lesser of the following: (i) the cancelled amount described in section IT 1 (Cancellation of life insurer's policyholder net losses); and (ii) the amount of available tax loss for the tax year that corresponds with the income year that includes 1 July 2010, before applying this section for the year: (b) used is the total amount of policyholder base allowable deductions that have arisen under this section for income years before the income year. Defined in this Act: amount , Commissioner , income year , life insurer , net loss , policyholder base , policyholder base allowable deduction , return of income , schedular policyholder base income , tax loss , tax year , taxable income Section EZ 61: inserted, on 1 July 2010, by section 199(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).