Section IS 2 — Income Tax Act 2007: Treatment of net losses resulting from certain expenditure

IS 2 Treatment of net losses resulting from certain expenditure When this section applies (1) This section applies if a company that is a mining company, or a resident mining operator, or a non-resident mining operator— (a) has a net mining loss for a tax year as a result of incurring mining exploration expenditure or mining development expenditure in a mining permit area; and (b) has an amount of net mining loss carried forward to a later tax year. Using loss balances (2) The company may subtract the amount of the net mining loss from its net income for the later tax year, even though the continuity of ownership required under section IA 5 (Restrictions on companies’ loss balances carried forward) is broken or is treated as absent under section GB 3 (Arrangements for carrying forward loss balances: companies), but only to the extent set out in subsection (3). Limit on amount (3) The amount subtracted under subsection (2) must be no more than the amount that would be the mining company’s net income if its only assessable income for the later tax year were from the mining permit area. Amounts carried forward (4) If the company cannot use all the net mining loss in the later tax year, the amount is carried forward to later tax years and subsection (2) applies to the remaining balance. Use against other income (5) The company may subtract the amount of the net mining loss from its net income that is not attributable to the mining permit area but only after meeting for the whole of the continuity period the requirements set out in sections GB 3 (Arrangements for carrying forward loss balances: companies) and IA 5 (Restrictions on companies' loss balances carried forward). For the purposes of applying section IA 5, the net mining loss is treated as if it were a tax loss component. Defined in this Act: amount , assessable income , company , mining company , mining development expenditure , mining exploration expenditure , mining permit area , net income , net mining loss , non-resident mining operator , resident mining operator , tax loss component , tax year Compare: 2004 No 35 ss IH 1(1) , IH 5 Section IS 2 heading: substituted (with effect on 1 April 2008), on 7 December 2009, by section 69(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(1)(a): amended (with effect on 1 April 2008), on 7 December 2009, by section 69(2) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(1)(b): amended (with effect on 1 April 2008), on 7 December 2009, by section 69(3) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(2): amended (with effect on 1 April 2008), on 7 December 2009, by section 69(4) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(4): amended (with effect on 1 April 2008), on 7 December 2009, by section 69(5) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(5) heading: added (with effect on 1 April 2008), on 7 December 2009, by section 69(6) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2(5): added (with effect on 1 April 2008), on 7 December 2009, by section 69(6) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2 list of defined terms loss balance : repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2 list of defined terms net mining loss : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2 list of defined terms tax loss : repealed (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63). Section IS 2 list of defined terms tax loss component : inserted (with effect on 1 April 2008), on 7 December 2009, by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).