Singapore legislation
Section 97D
of Economic Expansion Incentives (Relief from Income Tax) Act
Section 97D
Deduction of losses allowable to eligible holding company or eligible individual
(1)
Where any eligible holding company or eligible individual has incurred any loss arising from —
the sale of shares held by it or him in a venture company; or
the liquidation of a venture company,the loss shall be allowed as a deduction against the statutory income of the company or individual in accordance with section 37(2) of the Income Tax Act (Cap. 134) as if the loss were incurred from a trade or business carried on by it or him.
(2)
Where any eligible holding company has incurred any loss arising from —
the sale of shares held by it in a technology investment company or an overseas investment company; or
the liquidation of a technology investment company or an overseas investment company,the loss shall be allowed as a deduction against its statutory income in accordance with section 37(2) of the Income Tax Act as if the loss were incurred from a trade or business carried on by it.
(3)
Notwithstanding subsections (1) and (2), no deduction shall be allowed in respect of any loss referred to in those subsections if —
the shares in respect of which the loss was incurred were held by an eligible holding company or eligible individual in a venture company, or by an eligible holding company in a technology investment company or in an overseas investment company, for a period of less than 2 years from the date of issue of the shares, unless the loss was incurred as a result of the liquidation of the venture company, technology investment company or overseas investment company; or
the sale of shares or liquidation occurred after 8 years from the date of approval under this Part of the venture company, technology investment company or overseas investment company.
(4)
The deduction under subsections (1) and (2) shall be available only —
to a person to whom shares are allotted by a venture company or technology investment company on or after 1st April 1986;
to a person to whom shares are allotted by an overseas investment company on or after 1st April 1988,and shall not be available to any transferee of such shares.
(5)
For the purposes of subsections (1) and (2), the loss shall be the excess of the purchase price of the shares —
over the proceeds from the sale; and where the open market value at the date of the sale (or the value of net asset backing as determined by the Comptroller in the case of a company not quoted on any stock exchange) of the shares is greater than the sale proceeds, that value shall be deemed to be the proceeds from the sale; or
over the proceeds from the liquidation,as the case may be.