INCOME TAX ACT 1967 (ACT 53) PART III - ASCERTAINMENT OF CHARGEABLE INCOME Chapter 8 - Special cases
Section 59. Partnership losses.
(1) In the case of a sole proprietor of a proprietorship business or of a continuing partner of a continuing proprietorship business referred to in sections 55 and 56 respectively-
(a) the adjusted loss (in this section referred to as the provisional adjusted loss) of that proprietor or partner from that proprietorship or continuing proprietorship business for the basis period for a year of assessment shall be ascertained on the same principles as those on which his provisional adjusted income from the respective business would, but for that loss, have been ascertained under section 55 or under section 55 in conjunction with section 56, as the case may be;
(b) the divisible loss of that proprietorship or continuing proprietorship business, for the basis period for a year of assessment shall be found by the additional to the provisional adjusted loss of that sole proprietor or of that continuing partner, as the case may be, from that proprietorship business or continuing proprietorship business of his for that period of the total amount as mentioned in and as ascertained under subsection 55 (3) and (5) or subsection 56 (5) and (7), as the case may be;
(c) the divisible loss so found with respect to that proprietorship business or continuing proprietorship business shall be divided in like manner as divisible income from that business would have been divided if there had been divisible income for that period, and so much of that divisible loss as is thus found to be attributable to that sole proprietor or continuing partner shall be taken to be his share of that divisible loss for that period; and
(d) the adjusted loss of that sole proprietor or continuing partner from that proprietorship business or continuing proprietorship business for that basis period shall be taken to be the difference between-
(i) his share, ascertained pursuant to paragraph (c), of the divisible loss of that proprietorship business or continuing proprietorship business for that period; and
(ii) so much of the total amount added pursuant to paragraph (b) as relates to any remuneration, interest or expenses payable to or incurred in relation to him as a partner in the partnership in relation to which he is taken to be a sole proprietor or a continuing partner, as the case may be:
Provided that, if in relation to any person the sum found under subparagraph (d) (ii) exceeds the share referred to in subparagraph (d) (i), the difference between that sum and that share shall be treated as the amount of that person's adjusted income for that period from that proprietorship business or from that continuing proprietorship business, as the case may be.
(2) For the purposes of section 55 or section 55 in conjunction with section 56, where the total amount as mentioned in and ascertained under section 55 (3) and (5) or subsections 56 (5) and (7), as the case may be, exceeds the provisional adjusted income of the sole proprietor from his proprietorship business or the continuing partner from his continuing proprietorship business, as the case may be, for the basis period for a year of assessment, the excess shall be taken to be the divisible loss for that period from that proprietorship business or continuing proprietorship business, as the case may be,and paragraph (1) (c) and (d) shall apply accordingly.
(3) In a case where section 57 would apply but for the absence of any adjusted income, the foregoing subsections shall apply with the following additional provisions-
(a) the adjusted loss (in this subsection referred to as the computed adjusted loss) of the sole proprietor from his proprietorship business or of the continuing partner from his continuing proprietorship business, as the case may be, in relation to the main partnership for the basis period for a year of assessment shall be ascertained under subsection (1); and
(b) the computed adjusted loss for that basis period shall be divided between the partners of the subsidiary partnership in like manner as it would have been divided under paragraph 57 (b) if the computed adjusted loss had been computed adjusted income within the meaning of that section; and the amount of the share thereof so ascertained of any such partner as the sole proprietor or as the continuing partner, as the case may be, shall be taken to be his adjusted loss for the basis period for that year of assessment from the proprietorship business or continuing proprietorship business, as the case may be, which he is treated as having in relation to the main partnership by virtue of paragraph 57 (a).
