FINANCIAL CORPORATIONS (TRANSFER OF ASSETS AND LIABILITIES) ACT 1993 (ARCHIVE)

PART 3 - INCOME TAX RELIEF FOR TRANSFERS  

Division 4 - Capital gains and capital losses  

SECTION 20 (ARCHIVE)   TRANSFER OF NET CAPITAL LOSS  

20(1A)   [Effect of 1997 Assessment Act]  

In addition to its effect apart from this section, the Income Tax Assessment Act 1997 also has the effect it would have if sections 170-110 to 170-145 (which are about transferring net capital losses within wholly-owned company groups) of that Act were replaced by the provisions in Part 1 of Schedule 2 to this Act (which are a modified version of the rules in those sections) and the provisions in Part 2 of that Schedule were added at the end of Subdivision 170-B of that Act.

20(1B)   [Transfer from 1998/99 onwards]  

Subsection (1) does not enable a net capital loss to be transferred in the 1998-99 year of income or a later year of income.

20(1)   [Application of net capital loss transfer provisions]  

In addition to its effect apart from this section, section 160ZP of the Income Tax Assessment Act 1936 also has the effect it would have if both of the changes set out in subsections (2) and (3) of this section were made.

20(2)   [Conditions for transfer modified]  

The first change is that paragraphs 160ZP(7) (a), (b) and (ba) of the Income Tax Assessment Act 1936 are to be replaced by the following paragraphs:

``(a) assuming that:

(i) an asset (within the meaning of the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 ) had been transferred by a transferring corporation within the meaning of that Act (the `loss company' ) to a receiving corporation within the meaning of that Act (the `gain company' ) on the last day of a particular year of income of the loss company (the `notional transfer year' ); and

(ii) the requirements of paragraphs 7(6) (a) and (b) of that Act were satisfied in relation to that transfer;

that Act would have applied to that transfer; and

(b) the loss company incurred in respect of a year of income (the `loss year' ) a net capital loss that, apart from this section, would be taken into account in ascertaining whether a net capital gain accrued to the loss company, or the loss company incurred a net capital loss, in respect of the next succeeding year of income; and

(ba) the loss year is:

(i) the year of income in which that Act commenced; or

(ii) an earlier year of income; and

(bb) both the following conditions are satisfied in relation to a year of income (the `gain year' ) of the gain company:

(i) either:

(A) the gain year ends at the end of the notional transfer year; or

(B) the gain year corresponds to the year of income of the loss company next following the notional transfer year;

(ii) the gain year is:

(A) the year of income in which that Act commenced; or

(B) one of the 10 following years of income; and''.

20(3)   [Group company, limitation requirements omitted]  

The second change is that paragraphs 160ZP(7) (d) and (e) and subsection 160ZP(8) of the Income Tax Assessment Act 1936 are to be omitted.