DN 8 Ring-fencing cap on deduction: attributable FIF income method
Amount of deduction: FIF not elective attributing FIF

(1)

The deduction that a person is allowed in an income year for a FIF loss from a FIF (the first FIF) that is not an elective attributing FIF for the person in the income year is no more than the total of—

(a)

total attributed CFC income of the person for the income year from CFCs, each of which is resident in the same country as the first FIF for the relevant accounting period:

(b)

total FIF income of the person for the income year from other FIFs,—

(i)

each of which is resident in the same country as the first FIF for the relevant accounting period; and

(ii)

for each of which the person uses the attributable FIF income method.

Amount of deduction: elective attributing FIF

(1B)

The deduction that a person is allowed in an income year for a FIF loss from a FIF (the first FIF) that is an elective attributing FIF for the person in the income year is no more than the total of—

(a)

total attributed CFC income of the person for the income year from CFCs, each of which—

(i)

is resident in the same country as the first FIF for the relevant accounting period; and

(ii)

is an elective attributing CFC for the person in the income year; and

(iii)

has the same election commencement year as the first FIF:

(b)

total FIF income of the person for the income year from other FIFs, each of which—

(i)

is resident in the same country as the first FIF for the relevant accounting period; and

(ii)

is an elective attributing FIF for the person in the income year; and

(iii)

has the same election commencement year as the first FIF.

Income only once

(2)

When subsection (1) or (1B) is applied to a FIF loss, an amount of attributed CFC income or FIF income may be used only to the extent to which the income is not used when applying—

(a)

subsection (1) or (1B) to another FIF loss; or

(b)

section DN 4 to an attributed CFC loss.

Relationship with section IQ 3

(3)

Any excess not able to be deducted because of subsection (1) or (1B) is a FIF net loss able to be used under section IQ 3 (Ring-fencing cap on FIF net losses).

Defined in this Act: accounting period, amount, attributed CFC income, attributable FIF income method, attributed CFC loss, CFC, deduction, election commencement year, elective attributing CFC, elective attributing FIF, FIF, FIF income, FIF loss, FIF net loss, income year

Compare: 2004 No 35 s DN 9

Section DN 8(1) heading: replaced (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(1): replaced (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(1)(b)(ii): amended (with effect on 1 July 2009 and applying for income years beginning on or after that date), on 2 November 2012, by section 25(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(1B) heading: inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(1B): inserted (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(2): amended (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8(3): replaced (with effect on 30 June 2009), on 2 November 2012 (applying for income years beginning on or after 1 July 2009), by section 25(4) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8 list of defined terms attributable FIF income method: inserted (with effect on 1 July 2011), on 7 May 2012, by section 16(3)(b) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section DN 8 list of defined terms branch equivalent method: repealed (with effect on 1 July 2011), on 7 May 2012, by section 16(3)(a) of the Taxation (International Investment and Remedial Matters) Act 2012 (2012 No 34).

Section DN 8 list of defined terms election commencement year: inserted, on 2 November 2012, by section 25(5) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8 list of defined terms elective attributing CFC: inserted, on 2 November 2012, by section 25(5) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).

Section DN 8 list of defined terms elective attributing FIF: inserted, on 2 November 2012, by section 25(5) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).