Section FM 28 — Income Tax Act 2007: Refund when consolidated group has loss

FM 28 Refund when consolidated group has loss When this section applies (1) This section applies when— (a) a company has paid FDP to the Commissioner in an income year and, at the time the dividend was paid, the company was part of a consolidated group; and (b) the group has a tax loss component for the tax year that corresponds to the income year that may be used under section IA 3 and subpart ID (which relate to the treatment of tax losses); and (c) the nominated company of the consolidated group has filed its return of income under section FM 3(3) . Applying for refund (2) The company may apply to the Commissioner for a refund of the payment. The maximum refund is the smallest of the following amounts: (a) the amount of the payment paid in the income year: (b) the amount of the tax loss component multiplied by the rate set out in subsection (4)(b): (c) the credit balance of the group’s FDP account at the end of the tax year just ended. Tax loss component reduced (3) The amount of the tax loss component is reduced by an amount calculated using the formula— amount of refund tax rate. Definition of items in formula (4) In the formula,— (a) amount of refund is the amount of the refund paid to the company: (b) tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the tax year that corresponds to the income year. Relationship with section RM 21 (5) This section overrides section RM 21 (Refunds when loss balances used to reduce net income). Defined in this Act: amount , Commissioner , company , consolidated group , FDP , FDP account , foreign dividend , income tax , income year , nominated company , pay , return of income , tax loss component , tax year , Compare: 2004 No 35 s NH 5(7) Section FM 28(4)(b): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).