Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 175 - Use of a company ' s tax losses or deductions to avoid income tax  

Subdivision 175-A - Tax benefits from unused tax losses  

SECTION 175-15   Second case: someone else obtains a tax benefit because of tax loss available to company  

175-15(1)  
The Commissioner may disallow the *excluded loss if:


(a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and


(b) the scheme would not have been entered into or carried out if the excluded loss had not been available to be taken into account for the purposes of:

  • Division 36 (which is about tax losses of earlier years);
  • Division 165 (which is about the income tax consequences of changing ownership or control of a company);
  • former Subdivision 375-G (which is about film losses).
  • 175-15(2)  
    However, the Commissioner cannot disallow the *excluded loss if:


    (a) the person had a *shareholding interest in the company at some time during the income year; and


    (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.

    Note:

    Section 175-100 allows the Commissioner to disallow an excluded loss of an insolvent company.

    175-15(3)  
    An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .


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