Section ID 5 — Income Tax Act 2007: Pre-consolidation losses on exit: part-year rule

ID 5 Pre-consolidation losses on exit: part-year rule When this section applies (1) This section applies if a company that is part of a consolidated group has a loss balance to which section ID 2 applies in a tax year when the company leaves the consolidated group. Limit on amount available (2) In addition to the amount available under section IP 3(3) (Continuity breach: tax loss components of companies carried forward) but subject to the limit in section ID 3(2) , the amount of the company’s loss balance that is carried forward to the tax year must be no more than the consolidated group’s net income for the relevant part of the tax year. For part-year calculations, see subpart IP (Meeting requirements for part-years). Financial statements (3) The consolidated group must provide the Commissioner with adequate financial statements that disclose the amount that would be the consolidated group’s net income for the relevant part of the tax year, determined on a fair and reasonable basis of attribution. The statements must be filed with the consolidated group’s return of income for the tax year. Continuity requirements (4) For the purposes of this section, the company must meet the threshold level set out in section IC 2(1) (Threshold levels for grouping tax losses in tax year) for the relevant part of the tax year. Relationship with section ID 2 (5) This section overrides section ID 2 . Defined in this Act: amount , Commissioner , company , consolidated group , loss balance , net income , return of income , tax year , Compare: 2004 No 35 s IG 6(8)