Losses - home

If you make a tax loss in an income year you can generally carry it forward and deduct it in future years against income for tax purposes. This page provides comprehensive information on the rules for incurring and utilising tax losses as they apply to different types of taxpayers.

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What you need to know

Overview

What is a tax loss?

How individuals utilise losses

How trusts utilise losses

How companies utilise losses

Foreign losses

Record keeping and reporting

In detail

Companies

Trusts

Broad overview of the trust loss measures

An overview and examples of how to apply the trust loss measures.

Consolidation reference manual

This manual provides guidance on consolidation for income tax purposes. The latest updates incorporated into the CRM are current at 15 July 2011.

Guide to the loss recoupment rules

The amendments to the loss recoupment rules for companies relate to the tests certain companies must apply when seeking to deduct tax losses, net capital losses, foreign losses and bad debts. The changes mainly affect large companies and consolidated groups.

Foreign losses

There are restrictions on the utilisation of foreign losses incurred in an income year commencing before 1 July 2008.

How companies utilise losses

Companies can generally carry forward a tax loss indefinitely, and deduct it when they choose, provided they have either substantially maintained the same ownership and control or carried on the same business.

How individuals utilise losses

Individuals, both those in business (sole traders and partners) and those not in business, can generally carry forward a tax loss indefinitely, but must utilise a tax loss at the first opportunity.

How trusts utilise losses

If you operate your business as a trust and you incur a tax loss, you can generally carry forward a tax loss indefinitely, but must utilise a tax loss at the first opportunity. You cannot distribute the loss to the trust's beneficiaries

Broad overview of the trust loss measures

An overview and examples of how to apply the trust loss measures.

Consolidation reference manual

This manual provides guidance on consolidation for income tax purposes. The latest updates incorporated into the CRM are current at 15 July 2011.

Foreign losses

There are restrictions on the utilisation of foreign losses incurred in an income year commencing before 1 July 2008.

Guide to the loss recoupment rules

How companies utilise losses

How individuals utilise losses

Individuals, both those in business (sole traders and partners) and those not in business, can generally carry forward a tax loss indefinitely, but must utilise a tax loss at the first opportunity.

How trusts utilise losses

Losses overview

If you make a tax loss in an income year you can generally carry it forward and deduct it in future years against income for tax purposes.

Record keeping and reporting

Generally, you must keep proper records relating to your tax affairs for at least five years, but if you carry forward a tax loss, you may have to keep records for longer.

What is a tax loss?

You generally make a tax loss when the total deductions you can claim for an income year exceed your assessable and net exempt income for the year.

Losses overview

If you make a tax loss in an income year you can generally carry it forward and deduct it in future years against income for tax purposes.

Record keeping and reporting

Generally, you must keep proper records relating to your tax affairs for at least five years, but if you carry forward a tax loss, you may have to keep records for longer.

What is a tax loss?

You generally make a tax loss when the total deductions you can claim for an income year exceed your assessable and net exempt income for the year.