Section IE 2 — Income Tax Act 2007: Treatment of tax losses by amalgamating company

IE 2 Treatment of tax losses by amalgamating company When this section applies (1) This section applies if an amalgamating company that meets the requirements of section IA 5 (Restrictions on companies’ loss balances carried forward) ends its existence on a resident’s restricted amalgamation, and has a tax loss for a tax year that— (a) has not, before the date of amalgamation, been used by the company; and (b) could be made available and subtracted from the amalgamated company’s net income for the part of the tax year that ends with the date of amalgamation. Attributing losses to amalgamated company (2) If the amalgamated company meets the requirements of section IE 5 , the tax loss is attributed to the amalgamated company. The amalgamated company may, after the date of amalgamation, subtract the amount of the tax loss from its net income for the tax year, or make it available to another company to subtract from its net income for the tax year. Other amalgamating companies (3) In subsection (1)(b), the amalgamated company includes a company that has amalgamated with the amalgamating company before or during the tax year in which the amount is used. The tax year referred to in that subsection means the tax year of the relevant company. New companies (4) Subsection (1)(b) does not apply if the amalgamated company is incorporated only on the amalgamation. Defined in this Act: amalgamated company , amalgamating company , amount , company , net income , resident’s restricted amalgamation , tax loss , tax year , Compare: 2004 No 35 s IF 4