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  

Conditions for transfer

SECTION 170-33   Alternative test of relations between the loss company and other companies  

170-33(1)  
The conditions in subsections 170-30(1) and (2) are taken to be met in relation to the *loss company and the *income company if:


(a) the loss company is an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a *foreign bank; and


(b) the income company is covered by item 1 or 2 of the table in subsection 170-30(4) (because the company is the *head company of a *consolidated group or *MEC group at the time described in that item); and


(c) the relevant circumstances in this section exist. Circumstances

170-33(2)  
One circumstance is that there is another company (the first link company ) in relation to which all these conditions are met:


(a) the first link company became a *subsidiary member of a *consolidated group or *MEC group after the start of the *loss year but before the time described in the item of the table in subsection 170-30(4) that covers the *income company;


(b) the *tax loss could have been transferred from the *loss company to the first link company under this Subdivision (apart from subsection 170-30(4) and this section) for a *deduction year consisting of the *trial year for the first link company becoming a subsidiary member of that group had:


(i) the first link company continued to be *in existence as a separate entity (rather than being part of the head company of that group) when it was a subsidiary member of that group; and

(ii) the trial year not started before the start of the loss year; and

(iii) the first link company had enough assessable income for the trial year;


(c) the tax loss would have been incurred by the income company because of one or more transfers under Subdivision 707-A assuming the tax loss had been made by the first link company (apart from that Subdivision) for the loss year.

170-33(3)  
If the condition in paragraph (2)(c) could be met only if there had been a transfer described in that paragraph involving a company other than the first link company and the *income company, another circumstance is that the other company and the *loss company were *in existence and members of the same *wholly-owned group for the period:


(a) starting when the *tax loss would have been transferred under Subdivision 707-A to the other company as described in that paragraph; and


(b) ending when the tax loss would have been transferred under Subdivision 707-A from the other company as described in that paragraph.

170-33(4)  
It does not matter whether or not any of the transfers mentioned in subsection (3) would have involved the first link company or the *income company as well as the other company.

170-33(5)  
Another circumstance is that the conditions in subsections 170-30(1) and (2) would have been met for the *loss company and the *income company assuming:


(a) the *loss year consisted of the part of the income year in which the *tax loss would have been transferred to the income company under Subdivision 707-A as described in paragraph (2)(c) occurring after the time the transfer would have occurred; and


(b) so much (if any) of the *deduction year as occurred before the time the transfer would have occurred were disregarded.


 

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