Income Tax Assessment Act 1997



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

Subdivision 165-B - Working out the taxable income and tax loss for the income year of the change  

Working out the company's taxable income

SECTION 165-55   How to attribute deductions to periods  

The company ' s deductions for the income year are attributed to periods in the income year as follows.

The following deductions are attributed to each period in proportion to the length of the period:

(a) deductions for the decline in value of a *depreciating asset;

See Division 40 .

(b) deductions for *exploration or prospecting, or *mining capital expenditure, in connection with mining or quarrying;

See section 40-80 and Subdivisions 40-H and 40-I .

(ba) (Repealed by No 96 of 2014)

(c) deductions for expenditure, deductions for which are spread over 2 or more income years, but not:

(i) deductions for exploration or prospecting, or capital expenditure, in connection with mining or quarrying; or

See Subdivision 40-I .

(ii) *full year deductions (see subsection (5));

(d) deductions for expenditure of capital monies in connection with an Australian *film.

See former section 124ZAFA of the Income Tax Assessment Act 1936 .

All other deductions (except *full year deductions) are attributed to periods as if each period were an income year.

*Full year deductions are not attributed to any of the periods. They are brought in at a later stage of the process of calculating the company ' s taxable income for the income year.

These are full year deductions :

(a) deductions for bad debts under section 8-1 (about general deductions) or section 25-35 (about bad debts);

(b) deductions for losses on debt/equity swaps under section 63E of the Income Tax Assessment Act 1936 ;

(c) deductions, so far as they are allowable under Division 8 (which is about deductions) because Subdivision H (Period of deductibility of certain advance expenditure) of Division 3 of Part III of the Income Tax Assessment Act 1936 applies to the company in relation to the income year;

(d) (Repealed by No 101 of 2006 )

(e) (Repealed by No 101 of 2006 )

(fa) deductions for payments of pensions, gratuities or retiring allowances under section 25-50 ;

(fb) deductions for gifts under Division 30 ;

(f) deductions for *tax losses of earlier income years.

See Division 36 .

(g) (Repealed by No 169 of 1999)

(h) (Repealed by No 169 of 1999)

(i) (Repealed by No 101 of 2006 )

(j) (Repealed by No 34 of 2014)


However, a deduction for the balance of capital expenditure is not a full year deduction if the deduction results from the disposal, loss, lapse, termination of use or destruction of the property.

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