Loss attributing qualifying companies -section HA 26

2010 amendment to s HA 26 permits a shareholder in a loss attributing qualifying company to defer the transfer of the net loss to the company shareholders.

Section HA 26 of the Income Tax Act 2007 has been retrospectively amended to permit a shareholder in a loss attributing qualifying company to elect, in the same circumstances provided for in section HG 16(2) of the Income Tax Act 2004, to defer the transfer of the net loss of a loss attributing qualifying company to the shareholders of the company.

Section HA 26 of the 2007 Act did not permit a taxpayer to elect, in certain circumstances, to defer the transfer of the net loss of a loss attributing qualifying company to shareholders of the company. This right of election existed in the corresponding provision to section HA 26 (section HG 16(2) of the 2004 Act).

Under section HG 16(2), a shareholder could have elected to defer the transfer of a loss attributing qualifying company’s net loss to shareholders to the following tax year. This election could have been made if the company’s tax balance date was later than the electing shareholder’s tax balance date and the difference in balance dates meant that waiting for the information could cause the shareholder to file their return of income later than the due date.

Section HA 26 has been retrospectively amended to restore the effect of section HG 16(2) of the 2004 Act.