Who must complete a Consolidated groups losses schedule?
A head company of a consolidated group or multiple entry consolidated (MEC) group must complete the schedule and lodge it with the Company tax return 2020 (NAT 0656), if any of the following apply:
- The total of the group's tax losses and net capital losses carried forward to later income years is greater than $100,000.
- The total of its tax losses and net capital losses transferred from joining entities is greater than $100,000.
- The total of its tax losses deducted and net capital losses applied is greater than $100,000.
- It has an interest in a controlled foreign company (CFC) that has current year losses greater than $100,000.
- It has an interest in a CFC that has deducted or carried forward a loss to later income years greater than $100,000.
- It is a life insurance company, or is treated as a life insurance company under Subdivision 713-L of the ITAA 1997, and has a total of complying superannuation class tax losses and net capital losses carried forward to later income years greater than $100,000 (complete part D of the schedule).
The examples provided in these instructions are for illustration purposes only and may use lower figures, for simplicity.
A head company may need to complete the schedule for certain aspects of its net capital losses. While some of the information requested in the schedule is also requested in the Capital gains tax (CGT) schedule 2020 (NAT 3423) (CGT schedule), a head company that completes a consolidated groups losses schedule may also need to complete a CGT schedule.
If the head company completes the schedule for any aspect of its losses, it must complete all relevant parts of the schedule. For example, if a head company completes the schedule as a result of having tax losses and net capital losses carried forward to later income years greater than $100,000, it must also provide details of controlled foreign company (CFC) losses, even if the total of these losses is less than $100,000.
These instructions are based on the losses provisions, including those relating to consolidated groups contained in Division 707 of the Income Tax Assessment Act 1997 (ITAA 1997) and modifications to those provisions in relation to MEC groups contained in Division 719 of the ITAA 1997.