On 22/05/2013,
you requested for the version in force on 22/05/2013
incorporating all amendments published on or before 22/05/2013.
The closest version currently available is that of 31/03/2005.
97V.
—(1) Subject to this section, where, in any basis period for any year of assessment, any eligible investor has incurred any loss arising from —
(a)
the sale of qualifying shares held by him in a start-up company; or
(b)
the liquidation of the start-up company,
the loss shall be allowed as a deduction against the statutory income of the eligible investor for that year of assessment in accordance with section 37 of the Income Tax Act (Cap. 134) as if the loss were incurred from a trade or business carried on by the eligible investor.
[44/2002; 48/2004]
(2) For the purposes of this section —
(a)
any gain made or loss incurred on the sale of any qualifying share which occurred during the period of less than one year from the date of allotment to the eligible investor of such share shall be disregarded;
(b)
any gain made or loss incurred on the sale of any qualifying share, or from the liquidation of the start-up company which occurred after 6 years from the date of allotment of such share to the eligible investor shall be disregarded;
(c)
no deduction under this section shall be allowed for any year of assessment unless —
(i)
the total losses in respect of the sale of any qualifying share, or from the liquidation of the start-up company up to the end of the basis period for that year of assessment exceed the total gains made in respect of the sale of any qualifying share, or from the liquidation of the start-up company up to the end of that basis period; and
(ii)
the Comptroller is satisfied that the loss was not incurred for the purpose of obtaining a tax advantage;
(d)
the amount of deduction under this section shall not exceed the excess of the total losses over the total gains referred to in paragraph (c)(i); and
(e)
in computing the gain or loss from the sale of any qualifying share by an eligible investor, the shares allotted to him on an earlier date shall be deemed to have been sold first.
[44/2002; 48/2004]
(3) Where in the basis period for any year of assessment an eligible investor makes a gain from the sale of any qualifying share, or from the liquidation of a start-up company and where any loss from the sale of any qualifying share of that start-up company has been allowed as a deduction to the eligible investor under this section for any previous year of assessment, such gain shall, so far as it is not chargeable to tax as a revenue or trading receipt, be deemed to be income of the eligible investor chargeable to tax for that year of assessment, subject to the following provisions:
(a)
no gain shall be so deemed to be income unless the total amount of the losses allowed for the previous years of assessment exceed the total amount of the gains deemed to be income for previous years of assessment;
(b)
the amount of the gain chargeable to tax shall not exceed the excess of the total amount of the losses allowed for previous years of assessment over the total amount of the gains deemed to be income for previous years of assessment; and
(c)
the losses and gains referred to in subsection (2)(a) and (b) shall be disregarded.
[44/2002; 48/2004]
(4) Where in the basis period for any year of assessment an eligible investor incurs a loss from the sale of any qualifying share or from the liquidation of a start-up company and where any gain made from the sale of any qualifying shares of that start-up company, so far as it is not chargeable to tax as a revenue or trading receipt, has not been deemed to be income of the eligible investor chargeable to tax under this section for any previous year of assessment, such loss shall be allowed as a deduction against the statutory income of the eligible investor for that year of assessment under this section subject to the following provisions:
(a)
the amount of deduction shall not exceed the excess of the loss over the total amount of gains not deemed to be income for previous years of assessment;
(b)
the total amount of gains not deemed to be income for previous years of assessment shall be reduced by the excess of loss for that basis period over the deduction referred to in paragraph (a); and
(c)
the losses and gains referred to in subsection (2)(a) and (b) shall be disregarded.
[44/2002; 48/2004]
(5) For the purposes of this section, the loss shall be the excess of the purchase price of the qualifying shares —
(a)
over the proceeds from the sale; and where the value of net asset backing of the start-up company as determined by the Comptroller at the date of sale of such shares is greater than the sale proceeds, that value shall be deemed to be the proceeds from the sale; or
(b)
over the proceeds from the liquidation of the start-up company, as the case may be
[44/2002; 48/2004]
(6) For the purposes of this section, the gain shall be the excess of —
(a)
the proceeds from the sale; and where the value of net asset backing of the start-up company as determined by the Comptroller at the date of sale of such shares is greater than the sale proceeds, that value shall be deemed to be the proceeds from the sale; or
(b)
the proceeds from the liquidation of the start-up company, as the case may be, over the purchase price of the shares.
[44/2002; 48/2004]
(7) Section 37B of the Income Tax Act (Cap. 134) shall not apply to any loss allowed under subsection (1).
[44/2002; 48/2004]