Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 170 - Treatment of certain company groups for income tax purposes  

Subdivision 170-A - Transfer of tax losses within certain wholly-owned groups of companies  

Effect of transferring a tax loss

SECTION 170-25   Tax treatment of consideration for transferred tax loss  

170-25(1)  
If the *loss company receives any consideration from the *income company for the amount of the *tax loss:


(a) so much of the consideration as is given for the amount of the tax loss is neither assessable income nor exempt income of the loss company; and


(b) a *capital gain does not accrue to the loss company because of the receipt of the consideration.

Note:

However, the consideration may affect how section 170-210 modifies the cost base of direct and indirect interests in the loss company.

170-25(2)  
If the *income company gives any consideration to the *loss company for the amount of the *tax loss:


(a) the income company cannot deduct the amount or value of the consideration; and


(b) the income company does not incur a *capital loss because of the giving of the consideration.

Note:

However, the consideration may affect how section 170-215 modifies the cost base of direct and indirect interests in the income company.


 

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