Section IA 3 — Income Tax Act 2007: Using tax losses in tax year

IA 3 Using tax losses in tax year Paying shortfall penalties (1) A person who has a tax loss for a tax year may use some or all of the amount of the tax loss under section IW 1 (Shortfall penalties) to pay a shortfall penalty. Companies using tax losses (2) A company that has a tax loss for a tax year may— (a) make the amount available to another company under section IC 5 (Company B using company A’s tax loss) to subtract from the other company’s net income for the tax year; or (b) use the amount under section RG 6 (Using loss balances) to satisfy a liability for a foreign dividend payment (FDP) payable in the corresponding income year; or (c) use the amount under sections FM 26 to FM 28 , or RM 21 , (which relate to FDP) to obtain a refund of an overpayment of FDP made in the corresponding income year. Taxable distributions (3) The amount of a tax loss for a tax year of a beneficiary of a non-complying trust may be used under section HC 22 (Use of tax losses to reduce taxable distributions from non-complying trusts) to adjust the amount of a taxable distribution derived in the corresponding income year. Remaining loss balances carried forward (4) If a person has a balance of tax loss remaining for a tax year after the uses described in this section, the balance is carried forward to the next tax year as a loss balance. Relationship with other provisions in this subpart (5) Sections IA 5 , IA 8 , and IA 10 override this section. Defined in this Act: amount , company , corresponding income year , FDP , foreign dividend , loss balance , net income , non-complying trust , pay , shortfall penalty , tax loss , tax year , taxable distribution , Compare: 2004 No 35 ss BC 4(4) , HH 3(4) , IE 1(1), (2) , IG 10 , NH 3(2) , NH 4(5), (6) , NH 5(6), (7) Section IA 3(5) heading: substituted (with effect on 1 April 2008), on 7 December 2009, by section 55(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IA 3(5): amended (with effect on 1 April 2008), on 7 December 2009, by section 55(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).