INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 166 - Income tax consequences of changing ownership or control of a widely held or eligible Division 166 company  

Subdivision 166-CA - Changeover times and alteration times  

SECTION 166-80   How Subdivision 165-CC or 165-CD applies to a widely held or eligible Division 166 company  

166-80(1)  
This Subdivision modifies the way in which:


(a) Subdivision 165-CC applies in determining whether a changeover time (within the meaning of section 165-115C ) has occurred; or


(b) Subdivision 165-CD applies in determining whether an alteration time (within the meaning of section 165-115L ) has occurred;

in relation to a company that is:


(c) a *widely held company at all times during the income year; or


(d) an *eligible Division 166 company at all times during the income year; or


(e) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year.

Note 1:

Subdivision 165-CC is about the conditions a company that has an unrealised net loss must satisfy before it can have capital losses taken into account or deduct revenue losses. Subdivision 165-CD provides for reductions in cost bases and certain other reductions after alterations have occurred in the ownership or control of a loss company.

Note 2:

A company can choose that this Subdivision is not to apply to it: see section 166-90 .

Note 3:

See section 165-255 for the rule about incomplete income years.

Meaning of test period and test time

166-80(2)  
The company's test period is the period starting at the time that is the reference time for the purposes of Subdivision 165-CC or section 165-115L , as the case may be, and ending at each of the following times (the test time ):


(a) the end of the income year in which the reference time occurred;


(b) the end of a later income year;


(c) the *end of a *corporate change in the company.

Note 1:

See section 165-255 for the rule about incomplete test periods.

Note 2:

See section 166-175 to work out whether there is a corporate change.

Substantial continuity of ownership

166-80(3)  
A changeover time or an alteration time is taken not to have occurred in respect of the company during the test period if there is *substantial continuity of ownership of the company as between the start of the *test period and the *test time.

Note:

See section 166-145 to work out whether there is substantial continuity of ownership.

No substantial continuity of ownership

166-80(4)  
Subsections (5) and (6) have effect if there is no *substantial continuity of ownership of the company as between the start of the *test period and the *test time.

166-80(5)  
The *test time is taken to have been a changeover time or an alteration time, as the case may be, in respect of the company.

166-80(6)  
No other time during the *test period is a changeover time or an alteration time in respect of the company.


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