Income Tax Assessment Act 1997



Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-A - Deducting tax losses of earlier income years  

Operative provisions

SECTION 165-15   The same people must control the voting power, or the company must satisfy the business continuity test  

Even if a company meets the conditions in section 165-12 or 165-13 , it cannot deduct the *tax loss if:

(a) for some or all of the part of the *ownership test period that started at the end of the *loss year, a person controlled, or was able to control, the voting power in the company (whether directly, or indirectly through one or more interposed entities); and

(b) for some or all of the *loss year, that person did not control, and was not able to control, that voting power (directly, or indirectly in that way); and

(c) that person began to control, or became able to control, that voting power (directly, or indirectly in that way) for the purpose of:

(i) getting some benefit or advantage in relation to how this Act applies; or

(ii) getting such a benefit or advantage for someone else;
or for purposes including that purpose.

A person can still control the voting power in a company that is in liquidation etc.: see section 165-250 .


However, that person ' s control of the voting power, or ability to control it, does not prevent the company from deducting the *tax loss if the company satisfies the *business continuity test for the income year (the business continuity test period ).


Apply the *business continuity test to the *business that the company carried on immediately before the time (the test time ) when the person began to control that voting power, or became able to control it.

For the business continuity test: see Subdivision 165-E .

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