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  • Part A Losses carried forward to the 2002-2003 income year

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    Excludes foreign source losses and film losses.

    In all instances in which the entity has to complete a Losses schedule, the details of any tax losses and net capital losses carried forward to later income years are to be provided in part A. For example, if the entity completes a Losses schedule because it is claiming a deduction for film losses and the total of its tax losses and net capital losses is less than $100,000, details of those tax losses and net capital losses must be provided in part A.

    1 Tax losses carried forward to later income years

    Complete labels B to G and U where appropriate, otherwise leave blank.

    Note:

    • All entities that are required to complete a Losses schedule are also required to complete the details requested in this item if the entity has any tax losses carried forward to later income years.
    • Do not include net capital losses, foreign source losses or film losses at item 1.
    • Net capital losses carried forward to later income years are shown at item 2, film losses at Part F-Film losses and foreign source losses at Part G-Foreign source losses.
    • For the definition of a tax loss refer to section 995-1 of ITAA 1997.

    Subject to various rules, an earlier year tax loss is deducted in a later income year in the order in which it was incurred-to the extent that it has not already been applied-as shown by the following formulae:

    • If the entity has no net exempt income and has an excess of assessable income over total deductions - other than tax losses-deduct the tax loss from the excess assessable income. Refer to subsection 36-15(2) of ITAA 1997.
    • If the entity has net exempt income and an excess of assessable income over total deductions-other than tax losses-first deduct the tax loss from the net exempt income, with any remaining amount of tax loss then being deducted from the excess assessable income. Refer to subsection 36-15(3) of ITAA 1997.
    • If the entity has net exempt income and an excess of total deductions-other than tax losses-over assessable income, deduct the excess deductions from the net exempt income and then deduct the tax loss from any net exempt income that remains. Refer to subsection 36-15(4) of ITAA 1997.

    An entity's net exempt income is calculated in accordance with section 36-20 of ITAA 1997.

    This amount is not necessarily the same as the amount shown at label V-Exempt income in the Reconciliation statement of the Company tax return 2002.

    For more information refer to:

    • item 7, label R-Tax losses deducted in the Company tax return 2002 instructions
    • item 9, label F-Tax losses deducted in the Fund income tax and regulatory return 2002 instructions
    • item 22, label C-Tax losses deducted in the Trust tax return 2002 instructions.

    To find out how to obtain a copy of these publications, see infolines page.

    Note:

    • There are certain tests that must be satisfied for the entity to be able to apply a loss or to carry forward a loss to a later income year.
    • The entity must keep a record of its tax losses and account for any adjustments including those made by the Australian Taxation Office (ATO). These records must be retained for 5 years after the end of the year in which the losses of the entity were fully applied.
    • If required, the entity must be able to demonstrate not only the balance of any losses being either claimed or carried forward, but also how those losses arose.
    • An earlier year tax loss may be reduced by the commercial debt forgiveness provisions of Schedule 2C of ITAA 1936.
    • Non-primary production tax losses for the 1988-1989 and earlier income years may be carried forward for a period of 7 years from the year in which they were incurred. At the end of that period, non-primary production losses incurred prior to the 1989-1990 income year are not deductible. Refer to subsection 80(2) of ITAA 1936.
    • Losses incurred in relation to deriving foreign income are excluded from labels B to G and U. For rules which quarantine classes of deductions and losses of earlier years incurred in producing foreign source income refer to sections 79D and 160AFD of ITAA 1936. It is important to note that the definition of foreign income deductions contained in section 160AFD has been amended to remove debt deductions, other than those attributable to a permanent establishment-for example, interest and certain other expenses from the calculation of a foreign source loss. This means that these debt deductions are no longer subject to the foreign loss quarantining provisions. This change applies from the first income year beginning on or after 1 July 2001. Allowable foreign losses are taken into account in the calculation of assessable foreign income for taxation purposes-see Part G-Foreign source losses.
    • The film component of a tax loss (film loss) is excluded from labels B to G and U. For a film loss to be deductible refer to Divisions 36 and 375 of ITAA 1997. Film losses are only deducted from net exempt film income or net assessable film income for taxation purposes. For more information see Part F-Film losses.
    • Pooled development fund (PDF) tax losses are excluded from labels B to G and U. For more information on deductibility of PDF tax losses refer to Division 195 of ITAA 1997.
    • Capital losses may only be applied in accordance with Division 102 of ITAA 1997. A CGT schedule may need to be completed. For more information refer to the publication Guide to capital gains tax. To find out how to obtain a copy, see infolines page.

    For more information refer to label R-Tax losses deducted in the Reconciliation statement of the Company tax return 2002 instructions. To find out how to obtain a copy, see infolines page.

    Year of loss 2001-2002

    Show at label B the unapplied amount of tax losses incurred by the entity in the 2001-2002 income year and carried forward to later income years under section 36-15 of ITAA 1997.

    If there are no 2001-2002 tax losses carried forward to the 2002-2003 income year, leave blank.

    Year of loss 2000-2001

    Show at label C the unapplied amount of tax losses incurred by the entity in the 2000-2001 income year and carried forward to later income years under section 36-15.

    Do not show tax losses incurred in the 2000-2001 income year that have already been applied.

    If no tax losses were incurred in the 2000-2001 income year, or if tax losses incurred in that year have been applied in full, leave blank.

    Year of loss 1999-2000

    Show at label D the unapplied amount of tax losses incurred by the entity in the 1999-2000 income year and carried forward to later income years under section 36-15.

    Do not show tax losses incurred in the 1999-2000 income year that have already been applied.

    If no tax losses were incurred in the 1999-2000 income year, or if tax losses incurred in that year have been applied in full, leave blank.

    Year of loss 1998-1999

    Show at label E the unapplied amount of tax losses incurred by the entity in the 1998-1999 income year and carried forward to later income years under section 36-15.

    Do not show tax losses incurred in the 1998-1999 income year that have already been applied.

    If no tax losses were incurred in the 1998-1999 income year, or if tax losses incurred in that year have been applied in full, leave blank.

    Year of loss 1997 -1998

    Show at label F the unapplied amount of tax losses incurred by the entity in the 1997-1998 income year and carried forward to later income years under section 36-15.

    Do not show tax losses incurred in the 1997-1998 income year that have already been applied.

    If no tax losses were incurred in the 1997-1998 income year, or if tax losses incurred in that year have been applied in full, leave blank.

    Year of loss 1996-1997 and earlier income years

    Show at label G the total amount of unapplied tax losses incurred by the entity in the 1996-1997 and all earlier income years where those losses are available to be carried forward to later income years.

    Do not show tax losses incurred in the 1996-1997 and earlier income years that have already been applied.

    If no tax losses were incurred in the 1996-1997 and all earlier income years, or if tax losses incurred in those years have been applied in full, leave blank.

    Note: If a tax loss was not a primary production loss and was incurred in the 1988-1989 or an earlier income year, that loss can only be carried forward for a period of 7 years. Refer to section 80 of ITAA 1936.

    Total

    Show at label U the total of tax losses carried forward to the 2002-2003 income year. This amount is the total of the amounts shown at labels B to G.

    Transfer the amount at label U to the corresponding label on your tax return.

    Note about the examples for part A item 1 and 2:

    • The examples are only intended to be a guide and represent one of the many possible methods of calculating the amount of losses available to be applied or carried forward to later income years.
    • The examples apply equally to companies, trusts and funds with the exception that trusts and funds are not able to transfer losses to other entities, nor are they able to have losses transferred to them.
    • In all examples, it is assumed that the entity passes all tests, at all times, for that entity to be eligible to apply these losses.

    Example 1

    A company's trading results for the 1994-1995 to 2001-2002 income years and movement in the balances of its tax losses are as follows:

    Year

    Tax loss incurred
    $

    Net exempt income
    $

    Tax loss deducted
    $

    Tax loss transferred
    $

    Balance of tax losses
    $

    1994-1995

    10,000

    -

    -

    -

    10,000

    1995-1996

    30,000

    -

    -

    -

    40,000

    1996-1997

    20,000

    -

    -

    -

    60,000

    1997-1998

    -

    1,000

    2,000

    4,000

    53,000

    1998-1999

    -

    500

    -

    3,000

    49,500

    1999-2000

    6,000

    -

    -

    8,000

    47,500

    2000-2001

    1,000

    600

    -

    1,000

    46,900

    2001-2002

    -

    -

    5,000

    2,000

    39,900

    The company's loss calculation sheet shows the following progressive balances of tax losses for the income years following the 1994-1995 income year as follows:

    Balance

    1995

    1996

    1997

    1998

    1999

    2000

    2001

    2002

    1996-1997 and earlier income years

    10,000

    40,000

    60,000

    53,000

    49,500

    41,500

    40,500

    33,500

    1997-1998

    -

    -

    -

    -

    -

    -

    -

    -

    1998-1999

    -

    -

    -

    -

    -

    -

    -

    -

    1999-2000

    -

    -

    -

    -

    -

    6,000

    6,000

    6,000

    2000-2001

    -

    -

    -

    -

    -

    -

    400

    400

    2001-2002

    -

    -

    -

    -

    -

    -

    -

    -

    Total

    10,000

    40,000

    60,000

    53,000

    49,500

    47,500

    46,900

    39,900

    Complete part A, item 1 as follows:

    Year of loss

    Label

    Amount ($)

    2001-2002

    B

    -

    2000-2001

    C

    400

    1999-2000

    D

    6,000

    1998-1999

    E

    -

    1997-1998

    F

    -

    1996-1997
    and earlier
    Income years

    G

    33,500

    Total

    U

    39,900

    Transfer the amount at label U, $39,900, to the corresponding label on your tax return.

    End of example

     

    Example 2

    A company's trading results for the 1995-1996 to 2001-2002 income years and movement in the balances of its tax losses are as follows:

    Year

    Tax loss incurred
    $

    Net exempt income
    $

    Tax loss deducted
    $

    Tax loss transferred
    $

    Balance of tax losses
    $

    1995-1996

    6,000

    200

    -

    -

    5,800

    1996-1997

    -

    1,000

    1,000

    2,000

    1,800

    1997-1998

    5,000

    -

    -

    2,000

    4,800

    1998-1999

    1,000

    500

    -

    -

    5,300

    1999-2000

    -

    -

    600

    1,000

    3,700

    2000-2001

    -

    100

    -

    800

    2,800

    2001-2002

    2,000

    -

    -

    500

    4,300

    The company's loss calculation sheet shows the following progressive balances of tax losses for the income years following the 1995-1996 income year as follows:

    Balance of losses

    1996
    $

    1997
    $

    1998
    $

    1999
    $

    2000
    $

    2001
    $

    2002
    $

    1996-1997 and earlier income years

    5,800

    1,800

    -

    -

    -

    -

    -

    1997-1998

    -

    -

    4,800

    4,800

    3,200

    2,300

    1,800

    1998-1999

    -

    -

    -

    500

    500

    500

    500

    1999-2000

    -

    -

    -

    -

    -

    -

    -

    2000-2001

    -

    -

    -

    -

    -

    -

    -

    2001-2002

    -

    -

    -

    -

    -

    -

    2,000

    Total

    5,800

    1,800

    4,800

    5,300

    3,700

    2,800

    4,300

    Complete part A, item 1 as follows:

    Year of loss

    Label

    Amount ($)

    2001-2002

    B

    2,000

    2000-2001

    C

    -

    1999-2000

    D

    -

    1998-1999

    E

    500

    1997-1998

    F

    1,800

    1996-1997
    and earlier
    Income years

    G

    -

    TOTAL

    U

    4,300

    Transfer the amount at label U, $39,900, to the corresponding label on your tax return.

    End of example

    2 Net capital losses carried forward to later income years

    Note:

    • Complete labels H to M and V where appropriate, otherwise leave blank.
    • All entities that are required to complete a Losses schedule are also required to complete the details requested in this item if the entity has net capital losses carried forward to later income years.
    • The net capital losses of a company shown at labels H to M include any unapplied current year net capital losses calculated in accordance with Subdivision 165-CB of ITAA 1997 – see Part B-Ownership and same business test, item 4-see Do 'current year loss' provisions apply?-and any unapplied earlier year net capital losses worked out in accordance with Subdivision 165-CA of ITAA 1997, that applies to income years ending after 21 September 1999, except in so far as they relate to changes in the ownership or control of an entity that has an unrealised net loss.
    • The entity may be required to complete a CGT schedule. For more information refer to the publication Guide to capital gains tax. To find out how to obtain a copy, see infolines page.

    Year of loss 2001-2002

    Show at label H the amount of any unapplied net capital losses made by the entity in the 2001-2002 income year that can be carried forward and applied to reduce capital gains in later income years.

    If there are no net capital losses from the 2001-2002 income year that are available to be carried forward to later income years, leave blank.

    Year of loss 2000-2001

    Show at label I the amount of any unapplied net capital losses made by the entity in the 2000-2001 income year that can be carried forward and applied to reduce capital gains in later income years.

    Do not show net capital losses made in the 2000-2001 income year that have already been applied.

    If no net capital losses were made in the 2000-2001 income year, or if net capital losses made in that year have been applied in full, leave blank.

    Year of loss 1999-2000

    Show at label J the amount of any unapplied net capital losses made by the entity in the 1999-2000 income year that can be carried forward and applied to reduce capital gains in later income years. Do not show net capital losses made in the 1999-2000 income year that have already been applied.

    If no net capital losses were made in the 1999-2000 income year, or if net capital losses made in that year have been applied in full, leave blank.

    Year of loss 1998-1999

    Show at label K the amount of any unapplied net capital losses made by the entity in the 1998-1999 income year that can be carried forward and applied to reduce capital gains in later income years.

    Do not show net capital losses made in the 1998-1999 income year that have already been applied.

    If no net capital losses were made in the 1998-1999 income year, or if net capital losses made in that year have been applied in full, leave blank.

    Year of loss 1997-1998

    Show at label L the amount of any unapplied net capital losses made by the entity in the 1997-1998 income year that can be carried forward and applied to reduce capital gains in later income years.

    Do not show net capital losses made in the 1997-1998 income year that have already been applied.

    If no net capital losses were made in the 1997-1998 income year, or if net capital losses made in that year have been applied in full, leave blank.

    Year of loss 1996-1997 and earlier income year

    Show at label M the amount of any unapplied net capital losses made by the entity in the 1996-1997 and earlier income years that can be carried forward and applied to reduce capital gains in later income years.

    Do not show net capital losses made in the 1996-1997 and earlier income years that have already been applied.

    If no net capital losses were made in the 1996-1997 or earlier income year, or if net capital losses made in any of those years have been applied in full, leave blank.

    Note: Net capital losses incurred for the years prior to the 1995-1996 year are deemed to have been incurred in the 1995-1996 income year.

    Total

    Show at label V the total of unapplied net capital losses carried forward to the 2002-2003 income year at labels H to M.

    Transfer the amount at label V to the corresponding label on your tax return.

    Example 3

    A company's results for the 1996-1997 to 2001-2002 income years and movement in the balances of its net capital losses are as follows:

    Year

    Net capital loss incurred
    $

    Net capital loss applied
    $

    Net capital loss transferred
    $

    Balance of net capital losses
    $

    1996-1997

    5,000

    -

    -

    5,000

    1997-1998

    9,000

    -

    4,000

    10,000

    1998-1999

    -

    2,000

    1,000

    7,000

    1999-2000

    8,000

    -

    1,000

    14,000

    2000-2001

    -

    1,500

    -

    12,500

    2001-2002

    1,000

    -

    2,000

    11,500

    The company's loss calculation sheet shows the following progressive balances of net capital losses for the income years following the 1996-1997 income year as follows:

    Year

    1997
    $

    1998
    $

    1999
    $

    2000
    $

    2001
    $

    2002
    $

    1996-1997

    5,000

    1,000

    -

    -

    -

    -

    1997-1998

    9,000

    7,000

    6,000

    4,500

    2,500

    -

    1998-1999

    -

    -

    -

    -

    -

    -

    1999-2000

    8,000

    8,000

    8,000

    -

    -

    -

    2000-2001

    -

    -

    -

    -

    -

    -

    2001-2002

    1,000

    -

    -

    -

    -

    -

    Total

    5,000

    10,000

    7,000

    14,000

    12,500

    11,500

    Complete part A, item 2 as follows:

    Year of loss

    Label

    Amount ($)

    2001-2002

    M

    1,000

    2000-2001

    I

    -

    1999-2000

    J

    8,000

    1998-1999

    K

    2,500

    1997-1998

    L

    -

    1996-1997
    and earlier
    Income years

    M

    -

    Total

    V

    11,500

    Transfer the amount at label V, $11,500 to the corresponding label on your tax return.

    End of example
    Last modified: 09 Aug 2016QC 16568