Income Tax Assessment Act 1997
If you choose under this Subdivision to transfer an amount of a *tax loss for an income year (the loss year ):
(a) the amount is taken to be a tax loss incurred by the transferee in the loss year; and
(b) the transferee can deduct the amount in accordance with section 36-17 (which is about how to deduct a tax loss); and
(c) at the time of the choice, a *franking credit arises in the *franking account of the transferee; and
(d) you can no longer *utilise the amount, and you are taken not to have incurred the tax loss to the extent of the amount. 417-100(2)
Despite paragraph (1)(a), if the loss year is the same as the income year of the transfer, the transferee is taken to have incurred the *tax loss in the income year before the loss year.
This rule is needed because Division 36 allows a tax loss to be deducted only if it was incurred in an earlier income year.417-100(3)
The amount of the *franking credit under paragraph (1)(c) is an amount equal to the amount of the *tax loss transferred multiplied by the standard corporate tax rate (within the meaning of Part IVA of the Income Tax Assessment Act 1936 ). 417-100(4)
Paragraph (1)(c) does not apply if you are not, and have never been, a *corporate tax entity.