Income Tax Assessment Act 1997
CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-5
-
CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS
Division 175
-
Use of a company
'
s tax losses or deductions to avoid income tax
Subdivision 175-CA
-
Tax benefits from unused net capital losses of earlier income years
SECTION 175-40
When Commissioner can disallow net capital loss of earlier income year
175-40(1)
This Subdivision sets out cases where the Commissioner may prevent a company, in working out its *net capital gain for an income year, from applying some or all of a *net capital loss it has for an earlier income year (or of part of one) (the excluded loss ). This is called disallowing the excluded loss.
175-40(2)
However, the Commissioner cannot *disallow the *excluded loss if, in determining (under section 165-96 ) whether Subdivision 165-A would prevent the company from deducting the loss (or the part of the loss) for the income year if the loss were a *tax loss of the company for that earlier income year, the company:
(a) would fail to meet a condition in section 165-12 (which is about the company maintaining the same owners) in respect of the income year; but
(b) would meet the condition in section 165-13 in respect of the income year by satisfying the *business continuity test under section 165-210 .
View history note
Hide history noteThis Subdivision sets out cases where the Commissioner may prevent a company, in working out its *net capital gain for an income year, from applying some or all of a *net capital loss it has for an earlier income year (or of part of one) (the excluded loss ). This is called disallowing the excluded loss.
Note:
A company ' s net capital gain for an income year is usually worked out under section 102-5 .
175-40(2)
However, the Commissioner cannot *disallow the *excluded loss if, in determining (under section 165-96 ) whether Subdivision 165-A would prevent the company from deducting the loss (or the part of the loss) for the income year if the loss were a *tax loss of the company for that earlier income year, the company:
(a) would fail to meet a condition in section 165-12 (which is about the company maintaining the same owners) in respect of the income year; but
(b) would meet the condition in section 165-13 in respect of the income year by satisfying the *business continuity test under section 165-210 .
Note:
Subdivision 165-A deals with the deductibility of a company ' s tax loss for an earlier income year if there has been a change in the ownership or control of the company in the period from the start of the loss year to the end of the income year.
This information is provided by CCH Australia Limited Link opens in new window. View the disclaimer and notice of copyright.