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The Issues Log

Issue: LP 4, LE 2(5)

Submission Number	85
Submitter	Withheld as requested
Section / Provision Income Tax Act 2007	LP 4
Section / Provision Income Tax Act 2004	LE 2(5)
Date Received	09/09/08
Description of issue	Section LP 4 of the Income Tax Act 2007 which deals with continuity rules for carrying forward credits in respect of dividends paid to non-resident investors appears to have changed. Section LP 4(2) does not seem to require a market value circumstance before calculating the market value interest as was required in section LE 2(5) of the Income Tax Act 2004. This has not been identified as an intended change in Schedule 51 of the Income Tax Act 2007.
Section / Provision Income Tax Act 1994
Status	Finalised
Outcome	An unintended legislative change arises in respect of section LP 4(2) of the Income Tax Act 2007 an should be amended retrospectively by: • replacing the ‘or’ between paragraphs (a) and (b) with ‘and’; and • inserting a requirement in paragraph (b) that it applies only where there is a ‘market value circumstance’ in respect of the company.

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