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

SCHEDULE 2  

NET CAPITAL LOSSES AND THE INCOME TAX ASSESSMENT ACT 1997

Part 1 - Replacement of sections 170-110 to 170-145  

Effect of transferring a net capital loss  

SECTION 170-125 (ARCHIVE)   TAX TREATMENT OF CONSIDERATION FOR TRANSFERRED NET CAPITAL 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.