Company tax losses

A company, like any other taxpayer, is generally entitled to carry forward losses incurred in one income year for deduction against its assessable income in subsequent years.

Prior to the introduction of the consolidation regime, a tax loss was generally able to be transferred between one company in a wholly-owned group and another. This is no longer the case (with a few exceptions). Accordingly, any tax losses that cannot be utilised by a company remain in the company until such time as the company is in a position to recoup those losses.

Tax losses previously generated by an individual, sole trader, partnership or trust cannot be transferred to a company structure. However, the consolidation regime does allow losses to be transferred to a consolidated group in limited circumstances.

    Last modified: 24 Feb 2010QC 19526