ATO ID 2002/422: Access to losses in SAP transitional year
Date of decision: 14 September 2001
Year of income: Other/Substituted Accounting Period 2000 Other/Substituted Accounting Period 2001
Business line: Public Groups and International

Issue
Will a taxpayer be entitled to claim a deduction pursuant to Division 36 of the Income Tax Assessment Act 1997 (ITAA 1997) for a three month income year where the tax losses are incurred in earlier years of income, where the special rules in section 36-25 of the ITAA 1997 are satisfied?

Decision
Yes. The taxpayer will be entitled to claim a deduction pursuant to Division 36 of the ITAA 1997 for a three month income year where the tax losses are incurred in earlier years of income where the special rules in section 36-25 of the ITAA 1997 are satisfied.

Facts
A taxpayer applied for and received approval from the Commissioner to adopt a SAP. The taxpayer agreed to calculate their taxable income or losses for the relevant SAP income year on the basis of the period that is determined to be the SAP transitional year.

Reasons for decision

Legislative references: Income Tax Assessment Act 1997 section 4-5 section 36-1 section 36-10 section 165-1 section 170-1 section 175-1 section 975-500 section 975-505
Case references: Norwich Superannuation Services Pty Ltd v. FC of T 99 ATC 2015 41 ATR 1091
Related public rulings and determinations: IT 2465
Related ATO interpretative decisions: ATO ID 2002/561 | ATO ID 2002/562
Subject references: Prior year losses Carry forward losses Current year losses Precedent Confirmed significant issue