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 170-145 (ARCHIVE)   MAXIMUM AMOUNT THAT CAN BE TRANSFERRED  

170-145(1)   Loss company can only transfer what it cannot use itself.  

The amount transferred cannot exceed the amount of the loss company's *net capital loss that, apart from the transfer, the loss company would carry forward to the next income year after the application year.

Note:

If the capital loss year and the application year are the same, the loss company would carry forward the whole of the net capital loss, because section 102-5 does not allow a net capital loss to be applied in the income year in which it was made.

Example:

In the application year the loss company has:

• a net capital loss from an earlier income year of $25,000; and

• other capital losses totalling $10,000; and

• capital gains totalling $20,000;

Of the $25,000 loss, the loss company can transfer to the gain company no more than:

$25,000 − ($20,000 − $10,000) = $15,000

170-145(2)    

170-145(3)    

170-145(4)