Taxation Laws Amendment Act (No. 3) 1992 (98 of 1992)

Part 2   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 4   Amendments relating to pooled development funds Interpretation

17   Net capital gains and net capital losses

Section 160ZC of the Principal Act is amended by adding at the end the following subsections:

"(6) If:

(a) at some time during the last day of a year of income, a company is not a PDF; and

(b) the company was a PDF throughout the last day of the previous year of income ('the final PDF year');

a net capital loss that the company is taken to have incurred in respect of the final PDF year is to be disregarded in ascertaining whether a net capital gain accrued to the company, or the company incurred a net capital loss, in the first-mentioned year.

"(7) However, subsection (6) does not apply to so much of the net capital loss as does not exceed the amount (if any) by which the total of:

(a) if the company is taken to have incurred a net capital loss in respect of the last year of income before the year of income at the start of which, or during which, it became a PDF - that net capital loss; and

(b) if the company incurred a capital loss or capital losses after that last year of income and before it became a PDF - that capital loss or those capital losses;

exceeds:

(c) if a capital gain or capital gains accrued to the company after that last year of income and before the year of income referred to in paragraph (6)(a) - that capital gain or the total of those capital gains; or

(d) otherwise - a nil amount.".