Section HM 35 — Income Tax Act 2007: Determining net amounts and taxable amounts

HM 35 Determining net amounts and taxable amounts What this section applies to (1) This section applies for the purposes of a calculation under section HM 36(2) . Net amounts (2) The net amount for an investor class of a multi-rate PIE for an attribution period is calculated using the formula— assessable income – deductions. Definition of items in formula (3) In the formula in subsection (2),— (a) assessable income is the total amount of the PIE's assessable income attributed to the class for the attribution period in the manner referred to in subsection (8), including any tax credits received for the income: (b) deductions is the total amount of the PIE’s expenditure or loss for which the PIE is allowed a deduction that is— (i) incurred by the PIE in deriving the assessable income referred to in paragraph (a); and (ii) attributed to the class for the attribution period. Net income or net loss (4) If the result of the formula is positive, the amount is net income of the class for the period. If the result of the formula is negative, the amount is a net loss of the class for the period. Taxable amounts (5) The taxable amount for an investor class of a multi-rate PIE for an attribution period is calculated using the formula— net income – net loss – other loss used. Definition of items in formula (6) In the formula in subsection (5),— (a) net income is the amount of the PIE’s net income referred to in subsection (4): (b) net loss is the amount of the PIE’s net loss referred to in subsection (4): (c) other loss used is the lesser of the following amounts: (i) the total amount for the class of formation loss that is attributable for the attribution period under sections HM 66 to HM 70 and any amount of land loss under section HM 65 that has not been used for an earlier period: (ii) the total amount of net income referred to in paragraph (a). Taxable income or tax loss (7) If the result of the formula is positive, the amount is taxable income of the class for the period. If the result of the formula is negative, the amount is a tax loss of the class for the period. Use of valuations or financial statements (8) Income and deductions of the multi-rate PIE are allocated to investors and investor classes for attribution periods as— (a) reflected in the PIE's valuation of investor interests, if the PIE makes these valuations: (b) shown in the PIE's financial statements, if the PIE does not makes the valuations referred to in paragraph (a). Defined in this Act: amount , assessable income , attribution period , deduction , formation loss , income , investor class , investor interest , land loss , multi-rate PIE , net income , net loss , PIE , tax loss , taxable income Compare: 2007 No 97 ss EG 3 , HL 19, HL 20 Section HM 35: inserted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section HM 35(3)(a): substituted (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 94(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section HM 35(8)(a): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 94(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).