Section HM 69 — Income Tax Act 2007: When formation losses carried forward are 5% or more of formation investment value: 3-year spread

HM 69 When formation losses carried forward are 5% or more of formation investment value: 3-year spread What this section applies to (1) This section applies to spread the formation loss over the period of 3 years from the date the entity becomes a PIE when the amount of formation loss carried forward under section HM 67 is 5% or more of the total market value of the PIE’s investments at the time it becomes a PIE. Amount (2) The maximum amount of formation loss that the PIE may allocate to an attribution period, when calculating under section HM 35(5) the taxable amount of an investor class for the attribution period, is the amount calculated using the formula— initial loss × days 1095. Definition of items in formula (3) In the formula,— (a) initial loss is the amount of formation loss: (b) days is the number of days in the attribution period. Unused formation losses (4) For the purposes of the calculation of the amount in subsection (2), the formation loss includes any unused formation loss that was allocated to an earlier attribution period. Treatment after 3-year period (5) After the end of the period of 3 years referred to in subsection (1), any residual formation loss may be allocated to an attribution period when a calculation is made under section HM 35(5) of the taxable amount for an investor class. Defined in this Act: amount , attribution period , formation loss , investor class , market value , PIE , tax year , taxable amount Compare: 2007 No 97 s HL 30(4), (5) Section HM 69: 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 69(5): substituted (with effect on 1 April 2010), on 7 September 2010 (applying for the 2010–11 and later income years), by section 74(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).