ATO Interpretative Decision

ATO ID 2003/364

Income Tax

Group company loss transfers: unsigned transfer agreement
FOI status: may be released

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Issue

Does a written agreement to transfer a tax loss under Subdivision 170-A of the Income Tax Assessment Act 1997 (ITAA 1997) need to be signed by the public officer(s) of the loss company and of the income company?

Decision

Yes. Paragraph 170-50(2)(c) of the ITAA 1997 provides that a written agreement must be signed by the public officer(s) of the loss company and the income company.

Facts

Loss Company and Income Company prepared a written agreement, within the requisite period specified in paragraph 170-50(2)(d) of the ITAA 1997, to transfer a tax loss under Subdivision 170-A of the ITAA 1997.

Due to an oversight by an employee of Loss Company, the public officer of that company did not sign the written agreement until after the lodgement of Income Company's tax return for the deduction year.

Reasons for Decision

For a written agreement to transfer a tax loss from Loss Company to Income Company under Subdivision 170-A of the ITAA 1997 to be valid, paragraph 170-50(2)(c) of the ITAA requires that the agreement be signed by the public officer(s) of Loss Company and Income Company.

As the relevant agreement was not signed until after the day of lodgement of Income Company's tax return for the deduction year, it is not valid and it is therefore treated as never having been made.

If it remains the intention of Loss Company and Income Company to make the particular tax loss transfer, then the Commissioner must be requested to allow further time, pursuant to paragraph 170-50(2)(d) of the ITAA 1997, within which a valid written agreement can be made by those companies.

Date of decision:  16 December 2002

Year of income:  Year ended 30 June 2002

Legislative References:
Income Tax Assessment Act 1997
   Subdivision 170-A
   paragraph 170-50(2)(c)
   paragraph 170-50(2)(d)

Keywords
Group company loss transfers

Business Line:  Losses and Capital Gains Tax Centre of Expertise

Date of publication:  15 May 2003

ISSN: 1445-2782

history
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You are here → 16 December 2002 Original statement
  18 December 2009 Archived

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