Page 1 of the schedule

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
• that, 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
• that, 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.

The transfer of losses provisions are limited to transfers involving an Australian branch of a foreign bank - see sections 170-30 and 170-130 of the ITAA 1997.

Part A Losses carried forward to the 2013-14 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, 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, 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 2013.

An earlier year tax loss may be reduced by the commercial debt forgiveness provisions of Division 245 of the ITAA 1997.

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 2013 (NAT 4151).

Year of loss

At the appropriate year, write the unapplied amount of the tax loss incurred by the entity in that year and carried forward to later income years under section 36-15 or section 36-17 (as applicable) of the ITAA 1997.

For 2007-08 and earlier income years, write the total amount for those years.

If no tax loss was incurred in a particular year, or if the tax loss incurred in that year has been applied in full, leave blank.

Total

Write at U the total of tax losses carried forward to the 2013-14 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 2013, Fund income tax return 2013, Self-managed superannuation fund annual return 2013.

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. The transfer of losses provisions are 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 2005-06 to 2012-13 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
	$	$	$		$
2005-06	10,000	4,000			6,000
2006-07	30,000				36,000
2007-08	20,000				56,000
2008-09		1,000	2,000		53,000
2009-10		500			52,500
2010-11	6,000				58,500
2011-12	1,000	600			58,900
2012-13			5,000		53,900

The company's loss calculation sheet shows progressive balances of tax losses for the 2005-06 to 2012-13 income years as follows:

Balance of losses	2005-06 $	2006-07 $	2007-08 $	2008-09 $	2009-10 $	2010-11 $	2011-12 $	2012-13 $
2007-08 and earlier income years	6,000	36,000	56,000	53,000	52,500	52,500	52,500	47,500
2008-09
2009-10
2010-11						6,000	6,000	6,000
2011-12							400	400
2012-13
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 2013.

2 Net capital losses carried forward to later income years

Complete H to M and V where appropriate; otherwise, leave blank.

You must 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 - see the Guide to capital gains tax 2013.

Year of loss

At the appropriate year, write the amount of any unapplied net capital loss made by the entity in that year that can be carried forward and applied to reduce capital gains in later income years.

For 2007-08 and earlier income years, write the total amount for those years.

If there is no net capital loss for a particular year, or the net capital loss made in that year has been applied in full, leave blank.

Total

Write at V the total of unapplied net capital losses carried forward to the 2013-14 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 2013, Fund income tax return 2013, Self-managed superannuation fund annual return 2013.

Example 2

A company's results for the 2007-08 to 2012-13 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
	$	$	$
2007-08	1,000		1,000
2008-09	9,000		10,000
2009-10		2,000	8,000
2010-11	8,000		16,000
2011-12		1,500	14,500
2012-13	1,000		15,500

The company's loss calculation sheet shows progressive balances of net capital losses for the 2007-08 to 2012-13 income years as follows:

Year	2007 - 08	2008 -09	2009 - 10	2010 -11	2011 - 12	2012 - 13
2007-08	1,000	1,000
2008-09		9,000	8,000	8,000	6,500	6,500
2009-10
2010-11				8,000	8,000	8,000
2011-12
2012-13						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 2013.