Income Tax Assessment Act 1997
The Commissioner may *disallow a *capital loss of a company if:
(a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital loss ) of the capital loss.
However, the capital loss may be disallowed only to the extent of the available capital loss.175-70(2)
The Commissioner may *disallow *capital losses of a company (or parts of them) if:
(a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital gains ) of the *capital gains it made:
(i) before it made the capital losses; and
(ii) in the same income year as it made them.
The disallowed capital losses and parts of capital losses may exceed the amount of the available capital gains.
The disallowance may result in a tax loss for the income year: see section 175-75 .175-70(3)
An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 . 175-70(4)
The Commissioner cannot *disallow under this section if:
(a) the person who has obtained or will obtain the tax benefit had a *shareholding interest in the company at some time during the income year; and
(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Section 175-100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.