Section LK 10 — Income Tax Act 2007: When group membership lacking in tax year in which credit arises

LK 10 When group membership lacking in tax year in which credit arises When this section applies (1) This section applies when a company that is part of a consolidated group of companies has a credit carried forward for a tax year, but the company was not part of the same consolidated group as 1 or more companies in the consolidated group in an earlier tax year in which the credit arises. Limitation on amount used (2) The amount of the credit carried forward and made available for the consolidated group to use under section LK 9(2) is limited to the sum of— (a) the amount of the credit carried forward that the company could use under section LA 2 or LA 4 (which relate to the company’s income tax liability), if the company were not part of the consolidated group for the tax year; and (b) the amount that each company in the consolidated group would have under section LK 6 in relation to the amount of credit carried forward if— (i) the consolidation of the companies is ignored; and (ii) all required steps are presumed taken for section LK 6 to apply. Relationship with section FM 3 (3) In subsection (2), section FM 3 (Liability of consolidated groups and group companies) applies to the calculation of the income tax liability. Defined in this Act: amount , company , consolidated group , income tax liability , tax year , Compare: 2004 No 35 s LC 16(4)