INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)
The Commissioner may disallow capital losses of a company (or parts of them) for a year of income if:
(a) a capital gain accrued to the company and some or all of the capital gain (the injected capital gain ) would not have accrued if the company had not incurred those capital losses; and
(b) the capital gain accrued in that year of income.
The disallowed capital losses and parts of capital losses may exceed the amount of the injected capital gain.
Note:
The disallowance may result in a net capital loss for the year of income (see section 160ZNX ).
160ZNT(2) [When Commissioner cannot disallow]The Commissioner cannot disallow the capital losses or parts of the capital losses if the continuing shareholders will benefit from the accrual of the injected capital gain to an extent that the Commissioner thinks fair and reasonable having regard to their respective shareholding interests in the company.
160ZNT(3) [References to losses]A reference to disallowing a capital loss or a part of a capital loss for a year of income is a reference to determining that a capital loss or a part of a capital loss, as the case may be, is not to be applied in determining whether a net capital gain has accrued, or a net capital loss is incurred, in respect of the year of income.
160ZNT(4) [Continuing shareholders]The continuing shareholders are the individuals who have shareholding interests in the company both immediately before the injected capital gain accrued, and immediately afterwards.
Disclaimer and notice of copyright applicable to materials provided by CCH Australia Limited
CCH Australia Limited ("CCH") believes that all information which it has provided in this site is accurate and reliable, but gives no warranty of accuracy or reliability of such information to the reader or any third party. The information provided by CCH is not legal or professional advice. To the extent permitted by law, no responsibility for damages or loss arising in any way out of or in connection with or incidental to any errors or omissions in any information provided is accepted by CCH or by persons involved in the preparation and provision of the information, whether arising from negligence or otherwise, from the use of or results obtained from information supplied by CCH.
The information provided by CCH includes history notes and other value-added features which are subject to CCH copyright. No CCH material may be copied, reproduced, republished, uploaded, posted, transmitted, or distributed in any way, except that you may download one copy for your personal use only, provided you keep intact all copyright and other proprietary notices. In particular, the reproduction of any part of the information for sale or incorporation in any product intended for sale is prohibited without CCH's prior consent.