Tax file number
Write the tax file number (TFN) of the entity.
Name of entity
Print the name of the entity.
The name shown must be the same as that shown on the entity's tax return.
Australian business number
Write the Australian business number (ABN), if any, of the entity.
Meaning of 'applied' and 'unapplied' in this schedule
Unless the context indicates otherwise:
An 'unapplied' tax loss includes a tax loss for which a deduction has not yet been claimed, that has not been reduced by net exempt income or, in the case of companies, has not been transferred to other companies that are members of the same wholly owned group.
Conversely, an 'applied' tax loss includes a tax loss for which a deduction has been claimed, that has been reduced by net exempt income or, in the case of companies, has been transferred to other companies that are members of the same wholly owned group.
An 'unapplied' net capital loss includes a net capital loss which has not been applied against capital gains or, in the case of companies, has not been transferred to other companies that are members of the same wholly owned group.
Conversely, an 'applied' net capital loss includes a net capital loss which has been applied against capital gains or, in the case of companies, has been transferred to other companies that are members of the same wholly owned group.
Part A Losses carried forward to the 2011-12 income year - excludes film losses
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 losses and account for any adjustments, including those made by the ATO. Records must be retained for at least five years from when they are prepared or from the completion of transactions to which they relate, whichever is later. To support claims for losses, records also should be retained at least until the end of the period of review for the income year in which the relevant losses are 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.
1 Tax losses carried forward to later income years
Complete B to G and U where appropriate; otherwise leave blank.
- Do not include net capital losses or film losses at item 1.
- Write net capital losses carried forward to later income years at item 2. Details of film losses carried forward are not required to be reported on this schedule.
- For the definition of a tax loss, see section 995-1 of the ITAA 1997.
- Include foreign loss component of tax losses that are carried forward to later income years. See Part E Foreign source losses.
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 deducted) as shown by the following formulas:
a. Entities other than corporate tax entities
- 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. See subsection 36-15(2) of the 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, then deduct any remaining amount of tax loss from the excess assessable income. See subsection 36-15(3) of the 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. See subsection 36-15(4) of the ITAA 1997.
b. Corporate tax entities
- If the entity has no net exempt income and has an excess of assessable income over total deductions (other than tax losses) deduct from that excess as much of the tax loss as the entity chooses. The entity may choose a nil amount. See subsection 36-17(2) of the 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, then deduct from the part of the total assessable income that exceeds those deductions as much of the undeducted amount of the tax loss (if any) as the entity chooses. See subsection 36-17(3) of the 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. See subsection 36-17(4) of the ITAA 1997. There is no choice available under this subsection.
The choice that the corporate tax entity has under subsection 36-17(2) or (3) for the later income year is subject to certain limitations; see subsection 36-17(5) of the ITAA 1997.
An entity's net exempt income is calculated in accordance with section 36-20 of the ITAA 1997.
This amount is not necessarily the same as the amount at V Exempt income item 7 on the Company tax return 2011.
For more information, see:
- R Tax losses deducted under 7 Reconciliation to taxable income or loss in Company tax return instructions 2011 (NAT 0669)
- M Tax losses deducted under 11Deductions in Fund income tax return instructions 2011 (NAT 71605)
- Tax losses deducted in Trust tax return instructions 2011
- Part E Foreign source losses.
- An earlier year tax loss may be reduced by the commercial debt forgiveness provisions of Schedule 2C to the ITAA 1936.
- Pooled development fund (PDF) tax losses are excluded from B to G and U. For more information on deductibility of PDF tax losses, see Division 195 of the ITAA 1997.
- Net capital losses may only be applied in accordance with Division 102 of the ITAA 1997. A CGT schedule may need to be completed. For more information, see the Guide to capital gains tax 2011 (NAT 4151).
Year of loss 2010-11
Write at B the unapplied amount of the tax loss incurred by the entity in the 2010-11 income year and carried forward to later income years under section 36-15 or section 36-17 (as applicable) of the ITAA 1997.
If there is no 2010-11 tax loss carried forward to the 2011-12 income year, leave blank.
Year of loss 2009-10
Write at C the unapplied amount of the tax loss incurred by the entity in the 2009-10 income year and carried forward to later income years under section 36-15 or section 36-17 (as applicable).
If no tax loss was incurred in the 2009-10 income year, or if the tax loss incurred in that year has been applied in full, leave blank.
Year of loss 2008-09
Write at D the unapplied amount of the tax loss incurred by the entity in the 2008-09 income year and carried forward to later income years under section 36-15 or section 36-17.
If no tax loss was incurred in the 2008-09 income year, or if the tax loss incurred in that year has been applied in full, leave blank.
Year of loss 2007-08
Write at E the unapplied amount of the tax loss incurred by the entity in the 2007-08 income year and carried forward to later income years under section 36-15 or section 36-17.
If no tax loss was incurred in the 2007-08 income year, or if the tax loss incurred in that year has been applied in full, leave blank.
Year of loss 2006-07
Write at F the unapplied amount of the tax loss incurred by the entity in the 2006-07 income year and carried forward to later income years under section 36-15 or section 36-17.
If no tax loss was incurred in the 2006-07 income year, or if the tax loss incurred in that year has been applied in full, leave blank.
Year of loss 2005-06 and earlier income years
Write at G the total amount of unapplied tax losses incurred by the entity in the 2005-06 and all earlier income years where those losses are available to be carried forward to later income years.
If no tax losses were incurred in the 2005-06 and all earlier income years, or if tax losses incurred in those years have been applied in full, leave blank.
Total
Write at U the total of tax losses carried forward to the 2011-12 income year. This amount is the total of the amounts at B to G.
Transfer this amount to U item 13Tax losses carried forward to later income years on your relevant Company tax return 2011, Fund income tax return 2011, Self-managed superannuation fund annual return.
For more information on how this amount is calculated, see Tax losses carried forward to later income years under 13 Losses information in the relevant instructions,
Examples for part A items 1 and 2:
- The examples are intended to be a guide only and represent some 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. Furthermore, note that the transfer of losses provisions have been amended and are now limited to transfers involving an Australian branch of a foreign bank. See section 170-30 of the ITAA 1997.
- 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 2003-04 to 2010-11 income years and movement in the balances of its tax losses are as follows:
Year |
Tax loss incurred |
Net exempt income |
Tax loss deducted |
Balance of tax loss |
|
$ |
$ |
$ |
$ |
||
2003-04 |
10,000 |
4,000 |
6,000 |
||
2004-05 |
30,000 |
36,000 |
|||
2005-06 |
20,000 |
56,000 |
|||
2006-07 |
1,000 |
2,000 |
53,000 |
||
2007-08 |
500 |
52,500 |
|||
2008-09 |
6,000 |
58,500 |
|||
2009-10 |
1,000 |
600 |
58,900 |
||
2010-11 |
5,000 |
53,900 |
The company's loss calculation sheet shows progressive balances of tax losses for the 2003-04 to 2010-11 income years as follows:
Balance of losses |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
2008-09 |
2009-10 |
2010-11 |
2005-06 and earlier income years |
6,000 |
36,000 |
56,000 |
53,000 |
52,500 |
52,500 |
52,500 |
47,500 |
2006-07 |
||||||||
2007-08 |
||||||||
2008-09 |
6,000 |
6,000 |
6,000 |
|||||
2009-10 |
400 |
400 |
||||||
2010-11 |
||||||||
Total |
6,000 |
36,000 |
56,000 |
53,000 |
52,500 |
58,500 |
58,900 |
53,900 |
Complete part A item 1 as follows:
Transfer the amount at U ($53,900) to U item 13Tax losses carried forward to later income years on your Company tax return 2011.
2 Net capital losses carried forward to later income years
Complete 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 at this item if the entity has net capital losses carried forward to later income years.
The net capital losses of a company shown at H to M include any unapplied current year net capital loss calculated in accordance with Subdivision 165-CB of the ITAA 1997.
The entity may be required to complete a CGT schedule. For more information, see the Guide to capital gains tax 2011.
Year of loss 2010-11
Write at H the amount of any unapplied net capital loss made by the entity in the 2010-11 income year that can be carried forward and applied to reduce capital gains in later income years.
If there is no net capital loss from the 2010-11 income year available to be carried forward to later income years, leave blank.
Year of loss 2009-10
Write at I the amount of any unapplied net capital loss made by the entity in the 2009-10 income year that can be carried forward and applied to reduce capital gains in later income years.
If no net capital loss was made in the 2009-10 income year, or if the net capital loss made in that year has been applied in full, leave blank.
Year of loss 2008-09
Write at J the amount of any unapplied net capital loss made by the entity in the 2008-09 income year that can be carried forward and applied to reduce capital gains in later income years.
If no net capital loss was made in the 2008-09 income year, or if the net capital loss made in that year has been applied in full, leave blank.
Year of loss 2007-08
Write at K the amount of any unapplied net capital loss made by the entity in the 2007-08 income year that can be carried forward and applied to reduce capital gains in later income years.
If no net capital loss was made in the 2007-08 income year, or if the net capital loss made in that year has been applied in full, leave blank.
Year of loss 2006-07
Write at L the amount of any unapplied net capital loss made by the entity in the 2006-07 income year that can be carried forward and applied to reduce capital gains in later income years.
If no net capital loss was made in the 2006-07 income year, or if the net capital loss made in that year has been applied in full, leave blank.
Year of loss 2005-06 and earlier income years
Write at M the amount of any unapplied net capital losses made by the entity in the 2005-06 and earlier income years that can be carried forward and applied to reduce capital gains in later income years.
If no net capital losses were made in the 2005-06 or earlier income years, or if net capital losses made in those years have been applied in full, leave blank.
Total
Write at V the total of unapplied net capital losses carried forward to the 2011-12 income year at H to M.
Transfer this amount to V item 13Net capital losses carried forward to later income years on your relevant Company tax return 2011, Fund income tax return 2011, Self-managed superannuation fund annual return.
Example 2
A company's results for the 2005-06 to 2010-11 income years and movement in the balances of its net capital losses are as follows:
Year |
Net capital loss incurred |
Net capital loss applied |
Balance of net capital losses |
$ |
$ |
$ |
|
2005-06 |
1,000 |
1,000 |
|
2006-07 |
9,000 |
10,000 |
|
2007-08 |
2,000 |
8,000 |
|
2008-09 |
8,000 |
16,000 |
|
2009-10 |
1,500 |
14,500 |
|
2010-11 |
1,000 |
15,500 |
The company's loss calculation sheet shows progressive balances of net capital losses for the 2005-06 to 2010-11 income years as follows:
Year |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
2005-06 |
1,000 |
1,000 |
||||
2006-07 |
9,000 |
8,000 |
8,000 |
6,500 |
6,500 |
|
2007-08 |
||||||
2008-09 |
8,000 |
8,000 |
8,000 |
|||
2009-10 |
||||||
2010-11 |
1,000 |
|||||
TOTAL |
1,000 |
10,000 |
8,000 |
16,000 |
14,500 |
15,500 |
Complete part A item 2 as follows:
Transfer the amount at V ($15,500) to V item 13Net capital losses carried forward to later income years on your Company tax return 2011.