Section HA 41 — Income Tax Act 2007: Calculating qualifying company election tax

HA 41 Calculating qualifying company election tax Formula (1) The amount of qualifying company election tax that a company must pay under section HA 40 is calculated using the formula— ( dividends + balances − assessable income − balances ) × tax rate. tax rate Definition of items in formula (2) The items in the formula are defined in subsections (3) to (6). Dividends (3) Dividends is the sum of the amounts that would be dividends if the company— (a) disposed of all its property, other than cash, to an unrelated person at market value for cash; and (b) met all its liabilities at market value, excluding income tax payable through disposing of the property or meeting the liabilities; and (c) was liquidated, with the amount of cash remaining being distributed to its shareholders without imputation credits or FDP credits attached. Balances (4) Balances is the sum of the following amounts: (a) the balance in the company’s imputation credit account: (b) the balance in the company’s FDP account: (c) an amount of income tax payable for an earlier income year but not paid before the relevant date, less refunds due for the earlier income year but paid after the relevant date. (d) [Repealed] Assessable income (5) Assessable income is the total assessable income that the company would derive by taking the actions described in subsection (3)(a) and (b) less the amount of any deduction that the company would have for taking those actions. Tax rate (6) 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 relevant income year of the company. Relevant date (7) In subsections (3) to (5), the relevant date for measuring items in the formula is the date just before the company became a qualifying company or, as applicable, at the time the company ended its existence. Income tax and refund (8) For the purposes of subsection (4)(c),— (a) income tax payable is income tax that would, when paid, give rise to a credit in the company’s imputation credit account under sections OB 4 to OB 29 (which relate to imputation credits): (b) a refund of income tax due is the amount that would, when paid, give rise to a debit to the company’s imputation credit account under section OB 30 to OB 59 (which relate to imputation debits): (c) if the company pays income tax with a purpose or intention of reducing the amount of election tax, the amount of credit in the imputation credit account is reduced by the amount of the credit arising from the company's action, unless that purpose is merely incidental. Defined in this Act: amount , assessable income , company , deduction , dividend , FDP account , FDP credit , imputation credit , imputation credit account , income tax , income year , liquidation , pay , qualifying company , qualifying company election tax , shareholder , Compare: 2004 No 35 s HG 11(1B), (2), (4) Section HA 41(4)(c): amended (with effect on 30 June 2009), on 6 October 2009, by section 259(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HA 41(4)(d): repealed (with effect on 30 June 2009), on 6 October 2009, by section 259(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HA 41(6): amended, on 1 April 2008, by section 562 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section HA 41(8)(c): substituted (with effect on 30 June 2009), on 6 October 2009, by section 259(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HA 41 list of defined terms FDP : repealed (with effect on 30 June 2009), on 6 October 2009, by section 259(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).