Section ID 2 — Income Tax Act 2007: Pre-consolidation losses: general treatment

ID 2 Pre-consolidation losses: general treatment When this section applies (1) This section applies in a tax year when a company that meets the requirements of section IA 5 (Restrictions on companies’ loss balances carried forward) and is part of a consolidated group has a pre-consolidation loss balance carried forward to the tax year. First use (2) The first use of the loss balance must be to make the amount of the loss balance available to the consolidated group to subtract from its net income, so far as it extends, for the tax year. Second use (3) If, after subsection (2) is applied, some of the loss balance remains, the company may choose to do 1 or more of the following: (a) subtract the remaining amount from its net income for the tax year: (b) make the remaining amount available to another consolidated group to subtract from its net income for the tax year: (c) make the remaining amount available under section IC 5 (Company B using company A’s tax loss). Third use (4) If, after subsections (2) and (3) are applied, a loss balance remains, the remaining amount is carried forward to the next tax year. Relationship with sections IA 3, IA 4, IC 5, and provisions in this subpart (5) This section overrides sections IA 3 , IA 4 , and IC 5 (which relate to the general use and grouping of tax losses). Sections ID 3 to ID 5 override this section. Defined in this Act: amount , company , consolidated group , net income , loss balance , tax year , Compare: 2004 No 35 s IG 6(4), (6), (7)