Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-B - Working out the taxable income and tax loss for the income year of the change  

Working out the company's taxable income

SECTION 165-55   How to attribute deductions to periods  

165-55(1)  
The company ' s deductions for the income year are attributed to periods in the income year as follows.

165-55(2)  
The following deductions are attributed to each period in proportion to the length of the period:


(a) deductions for the decline in value of a *depreciating asset;

See Division 40 .


(b) deductions for *exploration or prospecting, or *mining capital expenditure, in connection with mining or quarrying;

See section 40-80 and Subdivisions 40-H and 40-I .


(ba) (Repealed by No 96 of 2014)


(c) deductions for expenditure, deductions for which are spread over 2 or more income years, but not:


(i) deductions for exploration or prospecting, or capital expenditure, in connection with mining or quarrying; or

See Subdivision 40-I .


(ii) *full year deductions (see subsection (5));


(d) deductions for expenditure of capital monies in connection with an Australian *film.

See former section 124ZAFA of the Income Tax Assessment Act 1936 .

165-55(3)  
All other deductions (except *full year deductions) are attributed to periods as if each period were an income year.

165-55(4)  
*Full year deductions are not attributed to any of the periods. They are brought in at a later stage of the process of calculating the company ' s taxable income for the income year.

165-55(5)  
These are full year deductions :


(a) deductions for bad debts under section 8-1 (about general deductions) or section 25-35 (about bad debts);


(b) deductions for losses on debt/equity swaps under section 63E of the Income Tax Assessment Act 1936 ;


(c) deductions, so far as they are allowable under Division 8 (which is about deductions) because Subdivision H (Period of deductibility of certain advance expenditure) of Division 3 of Part III of the Income Tax Assessment Act 1936 applies to the company in relation to the income year;


(d) (Repealed by No 101 of 2006 )


(e) (Repealed by No 101 of 2006 )


(fa) deductions for payments of pensions, gratuities or retiring allowances under section 25-50 ;


(fb) deductions for gifts under Division 30 ;


(f) deductions for *tax losses of earlier income years.

See Division 36 .


(g) (Repealed by No 169 of 1999)


(h) (Repealed by No 169 of 1999)


(i) (Repealed by No 101 of 2006 )


(j) (Repealed by No 34 of 2014)

165-55(6)  


However, a deduction for the balance of capital expenditure is not a full year deduction if the deduction results from the disposal, loss, lapse, termination of use or destruction of the property.

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