Section ID 3 — Income Tax Act 2007: Pre-consolidation losses: use by group companies

ID 3 Pre-consolidation losses: use by group companies When this section applies (1) This section applies in a tax year when— (a) a company ( company A ) that is part of a consolidated group has a loss balance to which section ID 2 applies; and (b) company A, in the continuity period relating to a tax loss component included in the loss balance, does not have the required common ownership under section IC 3 (Common ownership: group of companies) with 1 or more companies in the consolidated group. Limit on amount available (2) The amount made available under section ID 2(2) to the consolidated group is limited as follows: (a) if all the companies, including company A, in the consolidated group meet the requirements of section IC 6(1) (Common ownership for period): the amount available is limited to the amount of the loss balance to the extent of the net income of the consolidated group for the tax year: (b) if some of the companies in the consolidated group meet the requirements of section IC 6(1) : the amount available is limited to the total of— (i) the amount that company A could subtract from its net income for the tax year if it were not in the tax year part of a consolidated group; and (ii) the amount that could be made available under section IC 5 (Company B using company A’s tax loss) to the other group companies in the tax year, ignoring the consolidation of the companies and presuming all steps required under section IC 5 were taken in order for the section to apply. Relationship with section FM 3 (3) In subsection (2), the calculation of the consolidated group’s net income must be made in accordance with section FM 3 (Liability of consolidated groups and group companies). Relationship with section ID 2 (4) This section overrides section ID 2 . Defined in this Act: amount , company , consolidated group , continuity period , group of companies , loss balance , net income , tax loss component , tax year , Compare: 2004 No 35 s IG 6(6) Section ID 3(1): substituted (with effect on 1 April 2008), on 6 October 2009, by section 300(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section ID 3 list of defined terms tax loss component : inserted (with effect on 1 April 2008), on 6 October 2009, by section 300(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).