Section FO 16 — Income Tax Act 2007: Amortising property

FO 16 Amortising property When this section applies (1) This section applies in an income year in which amortising property belonging to an amalgamating company passes to the amalgamated company on a resident’s restricted amalgamation. The passing of ownership is treated as a disposal of the property by the amalgamating company and an acquisition by the amalgamated company. Treatment of amalgamating company (1B) The amalgamating company is treated as neither deriving income nor having a deduction under sections EE 24 to EE 53 (which relate to disposals of depreciable property) as a result of the deemed disposal. Value: all pool property (2) If the amortising property forms the whole of a pool of property of the amalgamating company that is depreciated under sections EE 20 to EE 24 (which relate to depreciation under the pool method), the consideration for the disposal and acquisition is taken as the adjusted tax value of the pool immediately before the amalgamation. Value: part pool property (3) If the amortising property forms part of a pool of property of the amalgamating company that is depreciated under sections EE 20 to EE 24 , the consideration for the disposal and acquisition is taken as the lesser of— (a) the market value of the property; or (b) the adjusted tax value of the pool immediately before the amalgamation. Deductions for depreciation loss (4) If the amortising property is other than pool property of the amalgamating company, the amalgamated company is treated as having been allowed the deduction that the amalgamating company would have had for an amount of depreciation loss, or a deduction under any other amortisation provision of this Act, relating to the property. Defined in this Act: acquire , adjusted tax value , amalgamated company , amalgamating company , amortising property , amount , deduction , depreciation loss , dispose , income year , market value , other amortisation provision , pool , resident’s restricted amalgamation , Compare: 2004 No 35 s FE 6(1), (4) Section FO 16(1B) heading: inserted (with effect on 1 April 2008), on 6 October 2009, by section 235(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section FO 16(1B): inserted (with effect on 1 April 2008), on 6 October 2009, by section 235(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).