Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 170 - Treatment of certain company groups for income tax purposes  

Subdivision 170-B - Transfer of net capital losses within certain wholly-owned groups of companies  

Effect of transferring a net capital loss

SECTION 170-125   Tax treatment of consideration for transferred tax loss  

170-125(1)  
If the loss company receives consideration from the gain company for the transferred amount:


(a) the consideration is neither assessable income nor *exempt income of the loss company; and


(b) the loss company does not make a *capital gain because of receiving the consideration.

Note:

However, the consideration may affect how section 170-220 modifies the cost base of direct and indirect interests in the loss company.

170-125(2)  
If the gain company gives consideration to the loss company for the transferred amount:


(a) the gain company cannot deduct the consideration; and


(b) the gain company does not make a *capital loss because of giving the consideration.

Note:

However, the consideration may affect how section 170-225 modifies the cost base of direct and indirect interests in the gain company.


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