Section FM 11 — Income Tax Act 2007: Expenditure: nexus with income derivation

FM 11 Expenditure: nexus with income derivation When this section applies (1) This section applies when a company incurs expenditure or loss or has an amount of depreciation loss in a tax year or part of a tax year in which it is part of a consolidated group that— (a) is not expenditure or loss to which section FM 10 applies; and (b) would not be allowed as a deduction to the company in the absence of this section. Deduction (2) The company is allowed a deduction for the amount under section DV 17 (Consolidated groups: expenditure or loss incurred by group companies) if the consolidated group would be allowed a deduction for the amount, treating the group as if it were 1 company, because of a connection between— (a) the incurring of the expenditure or loss or amount of depreciation loss; and (b) the deriving of assessable or excluded income, or the carrying on of a business by another company in the consolidated group. Defined in this Act: amount , assessable income , business , company , consolidated group , deduction , depreciation loss , excluded income loss , tax year , Compare: 2004 No 35 s HB 2(1)(c)