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HM 65: Use of land losses of investor classes
or “How investment groups can use losses from land investments to reduce future taxable income”
You could also call this:

“Carrying forward losses from when a Portfolio Investment Entity (PIE) is first formed”

If you become a PIE (Portfolio Investment Entity), you might have something called a formation loss. This is a type of loss that happens when the PIE is first formed. You can carry this formation loss forward to future tax years when you’re operating as a PIE.

This rule applies to most types of PIEs, but not to multi-rate PIEs that use certain calculation methods (the exit calculation or quarterly calculation) to work out and pay their tax.

If you have a formation loss, you can include it in your loss balance. This loss balance can then be carried forward to future tax years when you’re a PIE, as allowed by Part I of the Income Tax Act, which deals with losses.

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Next up: HM 67: Formation losses carried forward to first quarter

or “Carrying forward company losses when becoming or changing type of investment entity”
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Part H Taxation of certain entities
Portfolio investment entities: Formation losses

HM 66Formation losses carried forward to tax year

  1. This section applies to an entity that becomes a PIE, other than a multi-rate PIE that calculates and pays tax using the exit calculation or quarterly calculation option under section HM 42 or HM 43, when the entity has a formation loss.

  2. The amount of formation loss may be included in a loss balance carried forward under Part I (Losses) to a tax year in which the entity is a PIE.

Compare
  • s HL 30(1), (2)
Notes
  • Section HM 66: inserted, on (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).