INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 707 - Losses for head companies when entities become members etc.  

Subdivision 707-C - Amount of transferred losses that can be utilised  

How much of a transferred loss can be utilised?

SECTION 707-335   Limit on utilising transferred losses if circumstances change during income year  

707-335(1)  
This section limits the amount of losses in a particular *bundle of losses transferred under Subdivision 707-A that can be *utilised by the transferee for an income year if:


(a) the losses in the bundle are transferred to the transferee after the start of the income year; or


(b) the value of the *available fraction for the bundle changes at a time within the period (the transferee's loss-holding period ) described in subsection (2).

707-335(2)  
The transferee's loss-holding period:


(a) starts at the start of the income year or, if the losses in the *bundle were transferred to the transferee from another entity during the income year, at the time of the transfer; and


(b) ends when one of these events occurs:


(i) the income year ends;

(ii) the transferee becomes a *subsidiary member of a *consolidated group.

707-335(3)  
The transferee cannot *utilise for the income year more of the losses than is reasonable having regard to:


(a) the method in section 707-310 for working out the maximum amount of the losses the transferee could utilise for the income year (apart from this section); and


(b) the number of days in the transferee's loss-holding period; and


(c) the value or values of the *available fraction for the *bundle during the transferee's loss-holding period; and


(d) the number of days in the transferee's loss-holding period for which the available fraction for the bundle has a particular value; and


(e) the principle that, if the transferee transferred the losses to itself under Subdivision 707-A after the start of the income year, the amount of the losses it can utilise for the income year should be worked out as if:


(i) the losses had been included in the bundle from the start of the income year; and

(ii) the available fraction for the bundle had been 1 from the start of the income year until the time of the transfer; and


(f) any other relevant matters.

707-335(4)  
Section 707-310 has effect subject to this section.


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