Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 417 - Timor Sea petroleum  

Subdivision 417-D - Transferring or applying tax losses  

SECTION 417-100   The effect of choosing to transfer losses  

417-100(1)  
If you choose under this Subdivision to transfer an amount of a *tax loss for an income year (the loss year ):


(a) the amount is taken to be a tax loss incurred by the transferee in the loss year; and


(b) the transferee can deduct the amount in accordance with section 36-17 (which is about how to deduct a tax loss); and


(c) at the time of the choice, a *franking credit arises in the *franking account of the transferee; and


(d) you can no longer *utilise the amount, and you are taken not to have incurred the tax loss to the extent of the amount.

417-100(2)  
Despite paragraph (1)(a), if the loss year is the same as the income year of the transfer, the transferee is taken to have incurred the *tax loss in the income year before the loss year.

Note:

This rule is needed because Division 36 allows a tax loss to be deducted only if it was incurred in an earlier income year.

417-100(3)  
The amount of the *franking credit under paragraph (1)(c) is an amount equal to the amount of the *tax loss transferred multiplied by the standard corporate tax rate (within the meaning of Part IVA of the Income Tax Assessment Act 1936 ).

417-100(4)  
Paragraph (1)(c) does not apply if you are not, and have never been, a *corporate tax entity.


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