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  

Conditions for transfer  

SECTION 170-140 (ARCHIVE)   THE GAIN COMPANY  

170-140(1)    
If the capital loss year and the application year are not the same, the gain company must not be prevented by Subdivision 165-CA or 175-CA from applying the transferred amount in working out its *net capital gain for the application year.

Note 1:

Subdivision 165-CA deals with the consequences of changing ownership or control of a company. Subdivision 175-CA deals with using a company's net capital losses to avoid income tax.

Note 2:

A company's net capital gain or net capital loss for an income year is usually worked out under section 102-5 .

170-140(2)    
If the capital loss year and the application year are the same, it must be the case that the gain company was not required to calculate its own *net capital gain or *net capital loss for the application year:

(a) under Subdivision 165-CB (because of a change in ownership or control); or

(b) under section 175-75 (because of an injected capital gain or loss).

Note:

In deciding whether paragraph (b) applies, remember that the transferred amount is taken to be a capital loss of the gain company for the application year (because of subsection 170-120(2) ).