You will need additional instructions if you have:
- deferred non-commercial business losses from a prior year
- for partnership activities - see 13 - Partnerships and trusts, or
- for sole trader activities - see question P8 in Business and professional items (NAT 2543)
- capital losses - see 18 - Capital gains
- expenses and losses in relation to earning foreign source income - see 20 - Foreign source income and foreign assets or property.
Answering item L1
You can only use these instructions if you had foreign losses in the 1998-99 to 2007-08 income years which you have not claimed as a deduction.
You have to complete this item whether or not you are able to claim a deduction for the losses this year.
If you became bankrupt before 1 July 2011, or were released from debts under an arrangement entered into under the bankruptcy laws before 1 July 2011, you generally cannot claim a deduction for tax losses incurred before you became bankrupt or were released from the debts.
If you have tax losses from more than one earlier income year, you should generally deduct the earliest losses first.
To complete this item on your tax return, you will need records of your tax losses (Australian and foreign sourced) of earlier income years.
Reduction of net foreign source income
In prior income years you could choose whether to use your tax losses to reduce your net foreign source income. From the 2008-09 income year, you no longer have this choice. Your assessable income, both Australian and foreign sourced, will be reduced by your carry-forward tax losses.
End of attention