ATO Interpretative Decision
ATO ID 2003/364
Income Tax
Group company loss transfers: unsigned transfer agreementFOI status: may be released
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This ATOID provides you with the following level of protection:
If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.
Issue
Does a written agreement to transfer a tax loss under Subdivision 170-A of the Income Tax Assessment Act 1997 (ITAA 1997) need to be signed by the public officer(s) of the loss company and of the income company?
Decision
Yes. Paragraph 170-50(2)(c) of the ITAA 1997 provides that a written agreement must be signed by the public officer(s) of the loss company and the income company.
Facts
Loss Company and Income Company prepared a written agreement, within the requisite period specified in paragraph 170-50(2)(d) of the ITAA 1997, to transfer a tax loss under Subdivision 170-A of the ITAA 1997.
Due to an oversight by an employee of Loss Company, the public officer of that company did not sign the written agreement until after the lodgement of Income Company's tax return for the deduction year.
Reasons for Decision
For a written agreement to transfer a tax loss from Loss Company to Income Company under Subdivision 170-A of the ITAA 1997 to be valid, paragraph 170-50(2)(c) of the ITAA requires that the agreement be signed by the public officer(s) of Loss Company and Income Company.
As the relevant agreement was not signed until after the day of lodgement of Income Company's tax return for the deduction year, it is not valid and it is therefore treated as never having been made.
If it remains the intention of Loss Company and Income Company to make the particular tax loss transfer, then the Commissioner must be requested to allow further time, pursuant to paragraph 170-50(2)(d) of the ITAA 1997, within which a valid written agreement can be made by those companies.
Date of decision: 16 December 2002Year of income: Year ended 30 June 2002
Legislative References:
Income Tax Assessment Act 1997
Subdivision 170-A
paragraph 170-50(2)(c)
paragraph 170-50(2)(d)
Keywords
Group company loss transfers
ISSN: 1445-2782
| Date: | Version: | |
| You are here → | 16 December 2002 | Original statement |
| 18 December 2009 | Archived |