Large Enterprises Update : Corrections
Correction - Large enterprises update December 2007
In the December 2007 issue of Large enterprises update, there are two errors in the "Tax mistakes made by large enterprises"section. Under "Company losses", the second bullet point is incorrect and under "Imputation", the second bullet point is incorrect. The text has been amended and the correct version is below.
Company losses
- Claiming a loss twice. Happens with groups of companies. Sometimes a loss is claimed in a member's return, and the same loss is claimed as part of the aggregated loss in the consolidated return.
- Carrying forward a loss despite a breach in shareholder continuity. Remember you can only carry a loss forward if the company maintains a common ownership of 49%.
- Loss offsets not balancing within a group of companies. For example, the losses offset by the profit companies don't equal the loss incurred by the loss company.
Imputation
Some of the errors made with imputation mirror those made with company losses.
- Recording a credit twice in group accounts. Sometimes a credit is recorded in a member's imputation credit account (ICA), and the same credit is recorded as part of the aggregated figure in the consolidated ICA.
- Carrying forward credits despite a breach in shareholder continuity. You can only carry your credits forward if the company maintains a common ownership of 66%.
Date published: 09 Apr 2008
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