Section HM 47 — Income Tax Act 2007: Calculation of tax liability or tax credit of multi-rate PIEs

HM 47 Calculation of tax liability or tax credit of multi-rate PIEs What this section does (1) This section quantifies the amount of the tax liability or tax credit of a multi-rate PIE for a calculation period. Calculating amount (2) The amount of the PIE’s tax liability or tax credit is the sum of the amounts calculated using the formula in subsection (3) for— (a) each investor class in which the investor has an investor interest: (b) each investor in an investor class: (c) each attribution period in the calculation period: (d) each day in an attribution period. Notified foreign investors (2B) For the purposes of subsection (2), for a notified foreign investor in a foreign investment PIE, the amount of the PIE's tax liability for each investor is the sum of the amounts calculated using the formula in subsection (3) for the amount attributed to the investor for each particular income source and investment type. Formula (3) The formula is— rate × amount. Definition of items in formula (4) In the formula,— (a) rate is— (i) the tax rate under section HM 58 or HM 60 , as applicable, that relates to the investor for each day for the period; or (ib) the tax rates applying under schedule 6 , table 1B (Prescribed rates: PIE investments and retirement scheme contributions) for an amount attributed to a notified foreign investor in relation to each income source and investment type; or (ii) 28%, if the PIE is treated as the sole investor under section HM 37 : (b) amount is the amount calculated under sections HM 36(1) and (2) and HM 37 , as applicable, for the investor. Result of formula: tax liability or tax credit (5) If the result of the formula in subsection (3) is positive, the amount is the PIE’s tax liability for the calculation period. If the result is negative, the amount is a tax credit of the PIE under section LS 1 (Tax credits for multi-rate PIEs), see section HM 55 . However, a tax credit does not arise under section LS 1 for a multi-rate PIE that chooses to use the provisional tax calculation option. Negative result and foreign investment PIEs (6) If the result of the formula in subsection (3) is negative and the multi-rate PIE has chosen under section HM 71B to become a foreign investment PIE, no tax credit arises in relation to an amount attributed to an investor in the PIE who is, at the time of attribution, a notified foreign investor. Defined in this Act: amount , attribution period , calculation period , foreign investment PIE , investor , investor class , investor interest , multi-rate PIE , notified foreign investor , PIE , tax credit Compare: 2007 No 97 ss EG 3 , HL 21 Section HM 47: 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 47(2)(a): amended (with effect on 1 April 2010), on 21 December 2010 (applying for the 2010–11 and later income years), by section 98(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section HM 47(2B) heading: inserted, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 76(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47(2B): inserted, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 76(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47(4)(a)(i): amended, on 1 October 2010, by section 6(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section HM 47(4)(a)(ib): inserted, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 76(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47(4)(a)(ii): amended, on 1 October 2010, by section 6(2) of the Taxation (Budget Measures) Act 2010 (2010 No 27). Section HM 47(6) heading: added, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 76(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47(6): added, on 29 August 2011 (applying for the 2012–13 and later income years for a foreign investment variable-rate PIE and a notified foreign investor in the PIE), by section 76(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47 list of defined terms foreign investment PIE : inserted, on 29 August 2011, by section 76(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section HM 47 list of defined terms notified foreign investor : inserted, on 29 August 2011, by section 76(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).