ATO Interpretative Decision

ATO ID 2002/471 (Withdrawn)

Income Tax

Deductibility of prior year loss when taxpayer was a non resident in the loss year
FOI status: may be released

This ATO ID is withdrawn from the database as it is a straight application of the law and does not contain an interpretative decision.

This document incorporates revisions made since original publication. View its history and amending notices, if applicable.

CAUTION: This is an edited and summarised record of a Tax Office decision. This record is not published as a form of advice. It is being made available for your inspection to meet FOI requirements, because it may be used by an officer in making another decision.

This ATOID provides you with the following level of protection:

If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is a resident taxpayer entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for a tax loss from a prior year when the taxpayer was a non resident?

Decision

Yes. A resident taxpayer is entitled to a deduction under section 8-1 of the ITAA 1997 for a tax loss from a prior year when the taxpayer was a non resident.

Facts

The taxpayer is a resident of Australia for tax purposes in the current year of income.

The taxpayer was a non resident in the immediate prior income year.

While a non resident the taxpayer owned a rental property in Australia after the 1997 year of income.

The rental property incurred a tax loss in the immediate prior income year.

Reasons for Decision

Section 8-1 of the ITAA 1997 allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature, or relate to the earning of exempt income.

Section 12-5 of the ITAA 1997 contains a list of provisions about specific types of deductions. Contained in this list is Division 36 with regard to tax losses from earlier income years.

A tax loss is calculated under section 36-10 of the ITAA 1997.

Section 36-15 of the ITAA 1997 allows a tax loss for a loss year to be deducted in a later income year in the manner provided by that section. If there is no net exempt income and the taxpayer's total assessable income exceeds their total deductions (other than the tax loss) the tax loss is deducted from that excess.

The taxpayer is entitled to a deduction under section 8-1 of the ITAA 1997 for a tax loss carried forward from the earlier income year in the manner provided in section 36-15 of the ITAA 1997.

Date of decision: 30 January 2002

Year of income: Year ending 30 June 2003

Legislative References:
Income Tax Assessment Act 1997
   section 8-1
   section 12-5
   section 36-10
   section 36-15

Keywords
Carry forward losses
Deductions and expenses
Prior year losses
Resident/residency

Business Line: Small Business/Individual Taxpayers

Date of publication: 17 April 2002

ISSN: 1445-2782

history

	Date:	Version:
	30 January 2002	Original statement
You are here	4 July 2008	Archived

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