• 13. Losses

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    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    U Tax losses carried forward to later income years

    Show at U the total tax losses incurred by the fund that are to be carried forward to later income years, under section 36-15 of the ITAA 1997. The amount at U is the sum of:

    • the fund’s tax loss for 2013–14 (reduced by any net exempt income) and
    • the fund’s prior year tax losses.

    Include prior year tax losses only to the extent that they have not previously been deducted or reduced by net exempt income in 2013–14.

    Use the fund’s 2013–14 net exempt income, if any, to reduce the amount of any 2013–14 tax loss first and then any prior year tax losses. If the fund’s 2013–14 net exempt income is greater than its 2013–14 losses, you will reduce prior year losses, and the fund’s 2013–14 year losses will be nil. Example 4c shows the effect of exempt current pension income on tax losses.

    The meaning of ‘net exempt income’ is explained at M Tax losses deducted, item 11. Do not include any net capital losses to be carried forward to later income years at U; show these at V Net capital losses carried forward to later income years and Item 3 in the CGT schedule, if a schedule is required.

    If the fund is required to complete a Losses schedule 2014, the amount shown at U Tax losses carried forward to later income years item 1 in part A of that schedule must be the same as the amount shown at U on the tax return.

    Do not include an amount of quarantined losses in respect of non-arm’s length income at U. You should keep a record of the quarantined loss amount with the fund’s tax record.

    Last modified: 05 Nov 2014QC 40267