New Business Tax System (Integrity and Other Measures) Act 1999 (Incorporating amendments up to Act No. 78 of 2001) (169 of 1999)

Schedule 5   Transfers of losses within wholly-owned company groups

Financial Corporations (Transfer of Assets and Liabilities) Act 1993

16   Section 170-25 of Schedule 1

Repeal the section, substitute:

170-25 Tax treatment of consideration for transferred tax loss

(1) If the loss company receives any consideration from the income company for the amount of the tax loss:

(a) that consideration is neither assessable income nor exempt income of the loss company; and

(b) the loss company does not make a capital gain because of the receipt of the consideration.

Note: However, the consideration may affect how section 170-210 modifies the cost base of direct and indirect interests in the loss company.

(2) If the income company gives any consideration to the loss company for the amount of the tax loss:

(a) the income company cannot deduct the amount or value of the consideration; and

(b) the income company does not make a capital loss because of the giving of the consideration.

Note: However, the consideration may affect how section 170-215 modifies the cost base of direct and indirect interests in the income company.