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-CB - Tax benefits from unused capital losses of the current year  

SECTION 175-65   Capital loss injected into company because of available capital gain  

175-65(1)    
The Commissioner may * disallow a * capital loss of a company for an income year to the extent that the company would not have made the loss if it had not also made some or all of a * capital gain it made in that income year.

Note:

The disallowance may result in a tax loss for the income year: see section 175-75 .

175-65(2)    

The Commissioner cannot * disallow any of the * capital loss if:

(a) the * continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss being made; and

(b) the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective * shareholding interests in the company.

Note:

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

175-65(3)    
The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * capital loss was made, and immediately afterwards.