The Issues Log

Section / Provision Income Tax Act 2007

HA 21

Section / Provision Income Tax Act 2004

HG 11(3)

Date Received

Section HA 21 states that in an income year in which a non-QC company becomes a QC, \"subparts IA and IQ (which relate to the treatment of foreign losses) do not apply to carry forward a loss balance of the company.\" On becoming a QC, pre-existing losses are forfeited, but the current wording seems to imply that only foreign losses are forfeited (perhaps this has something to do with the wording used in section HA 25(2)(a) and (7), which does deal with the carrying forward of certain foreign losses). Perhaps the wording in brackets could be amended eg to \"(which relate to the use of tax losses and the treatment of certain foreign losses)\" to make it clearer that all losses, and not just foreign losses, are being referred to? 

HG 11(3)

The Panel has concluded and agree there is no unintended legislative change in respect of HA 11(5) of the Income Tax Act 2007.

It may be that a clarification is required.