Paragraph 21 Tax equity partnerships

Section 176E (flow-through tax benefits: proportional amortisation method) is amended as follows.

In subsection (1), in Step 2—

Also in subsection (1), in Step 7, for “flow-through benefits” substitute “flow-through tax benefits”.

In subsection (2), for “covered tax balance” substitute “qualifying current tax expense”.

At the end insert—

“(3)

Subsections (4) to (6) apply in relation to an investor, an arrangement and an accounting period if flow-through tax benefits were provided to the investor under the arrangement in at least one earlier accounting period.

(4)

Where the result of Step 3 in subsection (1) would (but for this subsection) be greater than N, this section has effect as if the result of Step 3 were N.

(5)

To find N—

(a)

identify the amount that was the result of Step 3 in subsection (1) in each earlier accounting period in which flow-through tax benefits were provided to the investor under the arrangement,

(b)

add together all the amounts identified under paragraph (a), and

(c)

subtract the result of paragraph (b) from the result of Step 1 in subsection (1).

The result is N, unless the result is below nil, in which case N is nil.

(6)

A reference in subsection (5)(a) to the result of Step 3 in subsection (1) in an earlier accounting period, where subsection (4) had effect in relation to the earlier period, is to the result of that Step as modified under subsection (4).”