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GB 46: Deferral of surplus deductions from arrangements
or “Delaying tax deductions for certain financial arrangements when expenses exceed income”
You could also call this:

“Rules for calculating income, expenses, and property costs in group arrangements”

When you’re part of a group of people involved in an arrangement, there are special rules for how to calculate the money you earn, the expenses you can claim, and the cost of property you own as part of that arrangement.

For most groups, you need to use a method called consolidation. This means you treat the whole group as if it were one big entity. You add up all the money earned and expenses claimed by everyone in the group, but you don’t count any money that just moves between people in the group. This is the way accountants usually do it for big companies.

However, if your group is a partnership or a joint venture, you use a different method called the proportionate method. This means each person in the group calculates their share of the earnings, expenses, and property costs based on how much of the partnership or joint venture they own. This is the way accountants usually handle partnerships.

These rules help make sure that when the tax office looks at your arrangement, they’re seeing a fair picture of what’s really going on, whether you’re part of a big group or a smaller partnership.

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Next up: GB 48: Defined terms for sections GB 45 and GB 46

or “Explaining key terms used in specific tax law sections”
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Part G Avoidance and non-market transactions
Avoidance: specific

GB 47Calculation rules for sections GB 45 and GB 46

  1. The deductions and assessable income from an arrangement for each person in a group of persons, and the cost of property that is held by each person in the group as part of the arrangement, are calculated on a basis of consolidation for the elimination of intra-group balances in accordance with generally accepted accounting practice.

  2. The deductions and assessable income from an arrangement for each person in a group of persons, and the cost of property that is held by each person in the group as part of the arrangement, are calculated using the proportionate method in accordance with generally accepted accounting practice for partnerships, if the group is any of—

  3. persons who are a partnership and the partners in a partnership:
    1. a joint venture and the partners in the joint venture.

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        Notes
        • Section GB 47(2)(c): repealed, on , by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).
        • Section GB 47 list of defined terms LAQC: repealed, on , by section 172 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).