Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 707 - Losses for head companies when entities become members etc.  

Subdivision 707-C - Amount of transferred losses that can be utilised  

How much of a transferred loss can be utilised?

SECTION 707-335   Limit on utilising transferred losses if circumstances change during income year  

707-335(1)    
This section limits the amount of losses in a particular ^* bundle of losses transferred under Subdivision 707-A that can be ^* utilised by the transferee for an income year if:

(a) the losses in the bundle are transferred to the transferee after the start of the income year; or

(b) the value of the ^* available fraction for the bundle changes at a time within the period (the transferee's loss-holding period ) described in subsection (2).

707-335(2)    
The transferee's loss-holding period:

(a) starts at the start of the income year or, if the losses in the ^* bundle were transferred to the transferee from another entity during the income year, at the time of the transfer; and

(b) ends when one of these events occurs:

(i) the income year ends;

(ii) the transferee becomes a ^* subsidiary member of a ^* consolidated group.

707-335(3)    
The transferee cannot ^* utilise for the income year more of the losses than is reasonable having regard to:

(a) the method in section 707-310 for working out the maximum amount of the losses the transferee could utilise for the income year (apart from this section); and

(b) the number of days in the transferee's loss-holding period; and

(c) the value or values of the ^* available fraction for the ^* bundle during the transferee's loss-holding period; and

(d) the number of days in the transferee's loss-holding period for which the available fraction for the bundle has a particular value; and

(e) the principle that, if the transferee transferred the losses to itself under Subdivision 707-A after the start of the income year, the amount of the losses it can utilise for the income year should be worked out as if:

(i) the losses had been included in the bundle from the start of the income year; and

(ii) the available fraction for the bundle had been 1 from the start of the income year until the time of the transfer; and

(f) any other relevant matters.

707-335(4)    
Section 707-310 has effect subject to this section.