Section IA 7 — Income Tax Act 2007: Restrictions relating to ring-fenced tax losses

IA 7 Restrictions relating to ring-fenced tax losses Non-application of sections IA 2 to IA 4 (1) Sections IA 2 to IA 4 (the general rules ) do not apply to an amount referred to in subsections (2) to (8). Treatment as tax loss component (1B) For the purposes of the application of sections IA 5 , IA 6 , IA 9 , and IA 10 , a ring-fenced tax loss under this section is treated as if it were a tax loss component. Tax losses of LAQCs (2) The general rules do not apply in relation to a loss-attributing qualifying company (LAQC) to an amount that would have been a loss balance carried forward under section IA 3(4) if section HA 21 (Loss balances not carried forward) did not exist. The provisions that deal generally with these losses are sections HA 24 to HA 27 . But this subsection does not apply to a pre-LAQC loss balance dealt with under section HA 24(5) to (5C) (Treatment of tax losses other than certain foreign losses). Policyholder net losses [Repealed] (3) [Repealed] Investment funds’ excess expenditure (4) The general rules do not apply to excess expenditure of an investment fund under sections DV 5 and DV 7 (which relate to investment funds) except for— (a) the amount under section DV 5(4)(a) that the fund must treat as a tax loss component under section IA 2(4)(a)(i) ; and (b) the amount under section DV 7(2) that the fund chooses to treat as a tax loss component under section IA 2(4)(a)(ii) . Attributed CFC net losses (5) The general rules do not apply to an attributed CFC net loss except a surplus under section IQ 2(3) (Ring-fencing cap on attributed CFC net losses). The provisions that deal with this net loss, other than the surplus amount, are sections IQ 2 , IQ 4 , and IQ 6 to IQ 9 (which relate to foreign losses). FIF net losses (6) The general rules do not apply to a FIF net loss except a surplus amount under section IQ 3(3) (Ring-fencing cap on FIF net losses). The provisions that deal with this net loss are sections IQ 3 , IQ 5 , and IQ 6 to IQ 9 . Mining net losses (7) The general rules do not apply to a net loss of a mining company, a resident mining operator, or a non-resident mining operator to the extent to which the net loss relates to a mining permit area. The provisions that deal with these net losses are sections IS 1 to IS 4 and IS 6 (which relate to mining companies’ tax losses). Petroleum net losses (8) The general rules do not apply to a petroleum mining company’s net loss to the extent to which the net loss relates to a permit area. The provisions that deal with this net loss are sections IS 5 , IZ 2 , and IZ 3 (which relate to petroleum mining companies’ use of loss balances). Amounts remitted (9) The general rules do not apply to an amount that an associated person has remitted as a condition of a new start grant under section CX 48 (Amounts remitted as condition of new start grant) or EW 46 (Consideration when debtor released as condition of new start grant). Net losses of multi-rate PIEs (10) The general rules do not apply to a multi-rate PIE's net loss when the PIE does not calculate and pay tax using the provisional tax calculation option under section HM 44 (Provisional tax calculation option). Defined in this Act: amount , associated person , attributed CFC net loss , FIF net loss , LAQC, loss-attributing qualifying company, loss balance , mining company , mining permit area , multi-rate PIE , net loss , new start grant , non-resident mining operator , pay , permit area , petroleum mining company , PIE , provisional tax , ring-fenced tax loss , resident mining operator , tax , tax loss component Compare: 2004 No 35 ss DV 5(4)(b) , DV 7(2) , EY 42(10) , HG 16 , IE 1(2BB), (2C) , IE 3(5) , IE 4(6) , IG 4(4) , IG 5(4) , IG 7(2), (3) , IH 1 , IH 2(1) , IH 3–IH 5 , II 1(1), (2) Section IA 7(1B) heading: inserted (with effect on 1 April 2008), on 7 December 2009, by section 59(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IA 7(1B): inserted (with effect on 1 April 2008), on 7 December 2009, by section 59(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IA 7(2): substituted (with effect on 1 April 2008), on 7 September 2010 (applying for the 2008–09 and later income years), by section 81(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section IA 7(3) heading: repealed, on 1 July 2010, pursuant to section 296(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7(3): repealed, on 1 July 2010, by section 296(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7(5): amended (with effect on 1 April 2008), on 6 October 2009, by section 296(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7(6): amended (with effect on 1 April 2008), on 7 December 2009, by section 59(3) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IA 7(6): amended (with effect on 1 April 2008), on 6 October 2009, by section 296(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7(10) heading: substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 296(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7(10): substituted, on 1 April 2010 (applying for the 2010–11 and later income years), by section 296(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms life insurer : repealed, on 1 July 2010, by section 296(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms loss balance : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IA 7 list of defined terms multi-rate PIE : inserted, on 1 April 2010, by section 296(6)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms PIE : inserted, on 1 April 2010, by section 296(6)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms policyholder net loss : repealed, on 1 July 2010, by section 296(5) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms portfolio tax rate entity : repealed, on 1 April 2010, by section 296(6)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms provisional tax : inserted, on 1 April 2010, by section 296(6)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IA 7 list of defined terms ring-fenced tax loss : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).