Section IQ 3 — Income Tax Act 2007: Ring-fencing cap on FIF net losses

IQ 3 Ring-fencing cap on FIF net losses Limit on amount: branch equivalent method (1) If a person's FIF net loss is carried forward to a tax year (the current tax year ) or FIF net loss is made available to the person in the current tax year,— (a) FIF net loss relating to a tax year for which section IQ 2B applies to the person is available to be subtracted under section IQ 2 from the person's net income for the current tax year; and (b) FIF net loss relating to a tax year for which section IQ 2B does not apply to the person— (i) is available to be subtracted from the person's net income for the current tax year to the extent of the equivalent CFC loss under section IQ 2B ; and (ii) is reduced in the current tax year by the converted BE loss under section IQ 2B . Relationship with section CQ 5 (2) Despite subsection (1) and section IQ 2 , if the person’s FIF net loss is carried forward to a tax year and section CQ 5(1)(d) or (e) (When FIF income arises) applies, they may subtract the amount from their net income for the tax year, but only to the extent to which the amount is no more than their assessable income from interests that would be interests in a FIF for the tax year in the absence of that section. Treatment of excess (3) If the person cannot use all of the amount that is available tax loss under section IQ 2(1) because there is insufficient net income, the surplus is no longer available to them as a FIF net loss, but becomes a tax loss component under section IA 2(4) (Tax losses). Defined in this Act: amount , assessable income , attributed CFC income , branch equivalent method , CFC , deduction , FIF , FIF income , FIF net loss , net income , tax year Compare: 2004 No 35 s IE 4(2)–(6) Section IQ 3(1): substituted (with effect on 30 June 2009), on 29 August 2011 (applying for income years beginning on or after 1 July 2009), by section 96(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section IQ 3(2): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 96(3) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section IQ 3(3) heading: added (with effect on 1 April 2008), on 6 October 2009, by section 304(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IQ 3(3): added (with effect on 1 April 2008), on 6 October 2009, by section 304(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IQ 3(3): amended (with effect on 1 April 2008), on 29 August 2011 (applying for the 2008–09 and later income years), by section 96(4) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63). Section IQ 3 list of defined terms attributed CFC income : inserted (with effect on 1 April 2008), on 6 October 2009, by section 304(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section IQ 3 list of defined terms CFC : inserted (with effect on 1 April 2008), on 6 October 2009, by section 304(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).