Income Tax Assessment Act 1997

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

(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 (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. (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. (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. (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.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-35 — The loss company

(1) The * loss company: (a) must be an Australian resident and not a * prescribed dual resident; and (b) must not be a * dual resident investment company in either the * loss year or the * deduction year. (2) If the * loss year and the * deduction year are the same, it must be the case that the * loss company was not required to calculate the * tax loss: (a) under section 165 ‑ 70 (because of a change in ownership or control); or (b) under section 175 ‑ 35 (because of injected income or deductions). (3) Also, it must be the case that neither Subdivision 165 ‑ A nor Subdivision 175 ‑ A would have prevented the * loss company from deducting the * tax loss in the * deduction year if it had had enough assessable income (including * assessable film income) to offset the tax loss. Note 1: Subdivision 165 ‑ A deals with the deductibility of a company’s tax loss for an earlier income year if there has been a change in the ownership or control of the company in the loss year or the income year. Subdivision 175 ‑ A is about the Commissioner preventing a company from getting certain tax benefits through its unused tax losses. Note 2: Division 707 affects the operation of Subdivision 165 ‑ A if the loss company incurred the tax loss because of a transfer under Subdivision 707 ‑ A.

Amendment history: Amended by No 95 of 1997, effective s 4 and Sch 3 (items 15–18): 30 June 1997 (s 2(1)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-40 — The income company

(1) The * income company must be an Australian resident and not a * prescribed dual resident. (2) It must not be prevented by Division 165 or 175 from deducting the transferred amount in the * deduction year. Those Divisions do not apply to the * income company if the * loss year and the * deduction year are the same. Note 1: Division 165 deals with the income tax consequences of changing ownership or control of a company. Division 175 deals with using a company’s tax losses to avoid income tax. Note 2: The condition in subsection (2) may not apply in some cases. See section 170 ‑ 42.

Amendment history: Amended by No 95 of 1997, effective s 4 and Sch 3 (items 15–18): 30 June 1997 (s 2(1)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-42 — If the income company has become the head company of a consolidated group or MEC group

(1) The condition in subsection (2) of this section applies to the * income company instead of the condition in subsection 170 ‑ 40(2) if the conditions in subsections 170 ‑ 30(1) and (2) are met in relation to the * loss company and the income company apart from section 170 ‑ 33 and either: (a) both these circumstances exist: (i) after the start of the * loss year but before the relevant time described in subsection 170 ‑ 30(4), the income company became the * head company of a * consolidated group or of a * MEC group that came into existence after the start of the loss year; (ii) the loss year and * deduction year are not the same; or (b) all these circumstances exist: (i) the income company is, at the relevant time described in subsection 170 ‑ 30(4), the head company of a MEC group; (ii) before that time but after the end of the loss year, the MEC group was involved in an application event described in section 719 ‑ 300 (but not covered by subsection 719 ‑ 300(4) or (5)); (iii) the income company would be taken under section 719 ‑ 305 to have transferred losses to itself under Subdivision 707 ‑ A, assuming it had made losses while head company of the group or of a consolidated group involved in the event; (iv) the MEC group or consolidated group came into existence before the start of the * loss year. Note: An application event involves either expanding an existing MEC group by including extra eligible tier ‑ 1 companies of the top company for the group or creating a MEC group because more companies become eligible tier ‑ 1 companies of the top company of which the head company of a consolidated group is an eligible tier ‑ 1 company. (2) The * income company must have been able to deduct the * tax loss in the * deduction year assuming that it had incurred the tax loss for the * loss year. (3) The condition in subsection (4) of this section applies to the * income company instead of the condition in subsection 170 ‑ 40(2) if the conditions in subsections 170 ‑ 30(1) and (2) are met in relation to the * loss company and the income company because of section 170 ‑ 33. (4) The * income company must have been able to deduct the * tax loss in the * deduction year assuming that it had incurred the tax loss, for the income year in which the loss would have been transferred to it as described in paragraph 170 ‑ 33(2)(c), because of one or more transfers under Subdivision 707 ‑ A described in that paragraph.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-45 — Maximum amount that can be transferred

Loss company can only transfer what it cannot use itself (1) The amount transferred cannot exceed what would be the amount of the * loss company’s * unutilised * tax loss at the end of the * deduction year if the loss company utilised the tax loss to the greatest extent possible. Transferred loss must not exceed what the income company can use (2) The amount transferred also cannot exceed the amount worked out as follows: Method statement Step 1. Add together the * income company’s assessable income and * net exempt income (if any) for the * deduction year. Step 2. Subtract the * income company’s deductions for the * deduction year, except deductions for amounts of * tax losses transferred to the income company (by the * loss company or any other company). Step 3. Subtract the * income company’s deductions for the * deduction year for amounts of * tax losses transferred to the income company (by the * loss company or any other company) by agreements made before the agreement by which the first amount is transferred. Example: In the deduction year: • the income company has assessable income of $60,000, net exempt income of $10,000 and deductions of $25,000 (apart from the transferred loss); and • another company, being a member of the same wholly ‑ owned group as the income company, transferred a tax loss of $15,000 to the income company; and • the loss company incurred a tax loss of $50,000. Of the $50,000 loss, the loss company can transfer no more than $30,000 ($60,000+$10,000 ‑ $25,000 ‑ $15,000) to the income company. (3) Subsection (2) does not apply if the * tax loss is a * film loss. In that case, the amount transferred also cannot exceed the amount worked out as follows: Method statement Step 1. Add together the * income company’s * net assessable film income and * net exempt film income (if any) for the * deduction year. Step 2. Subtract the * income company’s deductions for the * deduction year for amounts of * film losses transferred to the income company (by the * loss company or any other company) by agreements made before the agreement by which the first amount is transferred. (4) Subsections (2) and (3) do not apply if the transfer occurs because either or both of the conditions in subsections 170 ‑ 42(2) and (4) are met. In that case, the amount transferred also cannot exceed the amount worked out as follows: Method statement Step 1. Identify each * bundle of losses that, on the assumption in subsection 170 ‑ 42(2) or (4) (as appropriate), would have included the * tax loss or * film loss (as appropriate). Note 1: There will be 2 or more bundles of losses identified if both of the conditions in subsections 170 ‑ 42(2) and (4) are met. Note 2: There will be more than 1 bundle of losses identified on the basis of the assumption in paragraph 170 ‑ 42(4) if the conditions in subsections 170 ‑ 30(1) and (2) are met in relation to the loss company and the income company because of multiple applications of section 170 ‑ 33 each involving a different first link company. Step 2. For each * bundle identified, work out how much of the * tax loss or * film loss (as appropriate) the * income company would have been able to deduct in the * deduction year assuming that: (a) the loss could have been deducted in that year only after the deduction in that year of any other losses of that * sort that would have been included in the bundle, other than losses (the transferable losses ) that could be transferred from the * loss company to the income company for that year; and (b) if the bundle would have included 2 or more transferable losses of that sort—those losses could have been deducted only in the order in which the loss company incurred them. Note 1: If the assumption in subsection 170 ‑ 42(2) is relevant to the bundle, it would have included losses incurred by the income company and transferred (or taken to be transferred) to the company (from itself) under Subdivision 707 ‑ A. Note 2: If the assumption in paragraph 170 ‑ 42(4) is relevant to the bundle, it would have included losses actually incurred by the first link company and transferred (by one or more transfers under Subdivision 707 ‑ A) to the income company. Step 3. Total every result of step 2 for the * tax loss or * film loss (as appropriate).

Amendment history: Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13) | Amended by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15)

s 170-50 — Transfer by written agreement

(1) The transfer must be made by a written agreement between the * loss company and the * income company. (2) The agreement must: (a) specify the income year of the transfer (which may be earlier than the income year in which the agreement is made); and (b) specify the amount of the * tax loss being transferred; and (c) be signed by the public officer of each company; and (d) be made on or before the day of lodgement of the * income company’s * income tax return for the * deduction year, or within such further time as the Commissioner allows. Note: The agreement will usually be made in the next income year after the one for which the income company will deduct the loss.

s 170-55 — Losses must be transferred in order they are incurred

(1) If the * loss company has 2 or more * tax losses (other than * film losses) that it can transfer in the * deduction year, it can transfer them only in the order in which it incurred them. (2) If the * loss company has 2 or more * film losses that it can transfer in the * deduction year, it can transfer them only in the order in which it incurred them. (3) If: (a) the * loss company has 2 or more * tax losses, or 2 or more * film losses, it can transfer for the * deduction year; and (b) it incurred at least one of those losses apart from Subdivision 707 ‑ A and at least one of those losses because of a transfer under that Subdivision; it can transfer under this Subdivision the losses it incurred because of a transfer under Subdivision 707 ‑ A only after transferring under this Subdivision the losses it incurred apart from that Subdivision. (4) For the purposes of subsection (3), treat a loss incurred by the company both apart from that Subdivision and because of a transfer under that Subdivision as a loss incurred because of a transfer under that Subdivision. (5) Subsections (1) and (2) have effect subject to subsection (3).

Amendment history: Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-60 — Income company cannot transfer transferred tax loss

The * income company cannot transfer an amount of a * tax loss transferred to it, or any part of the amount.

s 170-65 — Agreement transfers as much as can be transferred

(1) If the amount specified in an agreement exceeds the maximum amount that the * loss company can transfer to the * income company in the * deduction year, only that maximum amount is taken to have been transferred. (2) O ne reason why an agreement might specify more than can be transferred is that an assessment has been amended since the agreement.

s 170-70 — Amendment of assessments

The Commissioner may amend an assessment to disallow a deduction for a transferred amount of a * tax loss: (a) if the agreement to transfer the tax loss is ineffective because the * loss company did not actually incur the loss; or (b) to the extent that section 170 ‑ 65 reduces the transferred amount of a tax loss because the loss company did not actually incur some of it. The Commissioner may do so despite section 170 (Amendment of assessments) of the Income Tax Assessment Act 1936 .

s 170-75 — Treatment like Australian branches of foreign banks

(1) The object of this section is to let * tax losses be transferred under this Subdivision to and from * Australian permanent establishments of * foreign entities that are * financial entities in the same way as tax losses can be transferred to and from Australian branches of * foreign banks. (2) This Subdivision (except this section) applies to an * Australian permanent establishment of a * foreign entity that is a * financial entity in the same way as this Subdivision applies to an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank.

Amendment history: Inserted by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent

s 170-101 — What this Subdivision is about

A company can transfer a surplus amount of its net capital loss to another company so that the other company can apply the amount in working out its net capital gain for the income year of the transfer. One of the companies must be an Australian branch of a foreign bank, and both companies must be members of the same wholly ‑ owned group. Table of sections 170 ‑ 105 Basic principles for transferring a net capital loss Effect of transferring a net capital loss 170 ‑ 110 When a company can transfer a net capital loss 170 ‑ 115 Who can apply transferred loss 170 ‑ 120 Gain company is taken to have made transferred loss 170 ‑ 125 Tax treatment of consideration for transferred tax loss Conditions for transfer 170 ‑ 130 Companies must be in existence and members of the same wholly ‑ owned group etc. 170 ‑ 132 Net capital loss made by the loss company because of a transfer under Subdivision 707 ‑ A 170 ‑ 133 Alternative test of relations between the loss company and other companies 170 ‑ 135 The loss company 170 ‑ 140 The gain company 170 ‑ 142 If the gain company has become the head company of a consolidated group or MEC group 170 ‑ 145 Maximum amount that can be transferred 170 ‑ 150 Transfer by written agreement 170 ‑ 155 Losses must be transferred in order they are made 170 ‑ 160 Gain company cannot transfer transferred net capital loss Effect of agreement to transfer more than can be transferred 170 ‑ 165 Agreement transfers as much as can be transferred 170 ‑ 170 Amendment of assessments Australian permanent establishments of foreign financial entities 170 ‑ 174 Treatment like Australian branches of foreign banks

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Repealed and substituted by No 68 of 2002, effective 24 Oct 2002 ( see s. 2)

s 170-105 — Basic principles for transferring a net capital loss

(1) A company can transfer a net capital loss (except a net capital loss from collectables) to another company so that the other company can apply it in working out its net capital gain for the income year of the transfer. (2) Both companies must be members of the same wholly ‑ owned group. There are other eligibility requirements that they must also satisfy. (2A) One of the companies must be an Australian branch of a foreign bank. The other company must be: (a) the head company of a consolidated group or MEC group; or (b) not a member of a consolidatable group. Note: This Subdivision applies to Australian permanent establishments of foreign entities that are financial entities in the same way as it applies to Australian branches of foreign banks. See section 170 ‑ 174. (3) The transferred loss must be “surplus” in the sense that, for the income year of the transfer, the transferring company does not have enough capital gains against which to apply it. The other company must have enough capital gains against which to apply it. (5) Neither company must be prevented by Subdivision 165 ‑ CA or 175 ‑ CA from applying the loss in working out its net capital gain for the income year of the transfer. Note: Subdivision 165 ‑ CA deals with the consequences of changing ownership or control of a company. Subdivision 175 ‑ CA deals with using a company’s net capital losses to avoid income tax. (6) The net capital loss is transferred by an agreement between the 2 companies. (7) The net capital loss can be transferred in the same year as it is made. In that case different rules apply. (8) The provisions of Subdivision 170 ‑ C (so far as they relate to the transfer of net capital losses) are to be disregarded in applying the provisions of this Subdivision where the relevant agreement referred to in section 170 ‑ 150 was made before 22 February 1999.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 108 of 1998, effective 7 Dec 1998 ( see s. 2) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Amended by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9)

s 170-110 — When a company can transfer a net capital loss

(1) A company (the loss company ) can transfer an amount of its * net capital loss for an income year (the capital loss year ) to another company (the gain company ) if the conditions in this Subdivision are met. (2) The amount transferred can be the whole or part of the * net capital loss. Note: A PDF cannot transfer a net capital loss, except one for a period before it became a PDF: see section 195 ‑ 30 of the Income Tax Assessment Act 1997 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 170-115 — Who can apply transferred loss

(1) If an amount of a * net capital loss is transferred, the gain company can apply the amount in working out its * net capital gain, but only for the income year of the gain company for which the amount is transferred. That income year is called the application year . Note: A company’s net capital gain or net capital loss for an income year is usually worked out under section 102 ‑ 5 or 102 ‑ 10. (2) The loss company can no longer * utilise the transferred amount and is taken not to have made the * net capital loss to the extent of that amount. (3) Despite subsection (1), if the * net capital loss is transferred because the conditions in section 170 ‑ 132 are met, the gain company is taken to have made the net capital loss for the income year for which the first prior transferor mentioned in that section made the net capital loss. (4) Despite subsection (1), if the * net capital loss is transferred because the condition in subsection 170 ‑ 142(4) is met, the gain company is taken to have made the net capital loss for the income year for which that subsection assumes the gain company made the net capital loss.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15)

s 170-120 — Gain company is taken to have made transferred loss

(1) If an amount of a * net capital loss is transferred, the amount is taken to be a * net capital loss of the gain company for the capital loss year. (2) However, if the capital loss year is the same as the application year, the amount is taken to be a * capital loss of the gain company for the application year.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 170-125 — Tax treatment of consideration for transferred tax loss

(1) If the loss company receives consideration from the gain company for the transferred amount: (a) the consideration is neither assessable income nor * exempt income of the loss company; and (b) the loss company does not make a * capital gain because of receiving the consideration. Note: However, the consideration may affect how section 170 ‑ 220 modifies the cost base of direct and indirect interests in the loss company. (2) If the gain company gives consideration to the loss company for the transferred amount: (a) the gain company cannot deduct the consideration; and (b) the gain company does not make a * capital loss because of giving the consideration. Note: However, the consideration may affect how section 170 ‑ 225 modifies the cost base of direct and indirect interests in the gain company.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent

s 170-130 — Companies must be in existence and members of the same wholly ‑ owned group etc.

(1) Both companies must be in existence during at least part of each of the following income years: (a) the capital loss year; and (b) the application year; and (c) any intervening income year. Note: In some cases, this condition may not apply, or may be taken to be met even if it is not actually met. See sections 170 ‑ 132 and 170 ‑ 133. (2) Also, both companies must be members of the same * wholly ‑ owned group at all times during those income years when both companies were in existence. Note: In some cases, this condition may not apply, or may be taken to be met even if it is not actually met. See sections 170 ‑ 132 and 170 ‑ 133. (3) One of the companies must be an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank. Note: The Australian branch can be taken to be a separate entity from the foreign bank for this Subdivision. See Part IIIB of the Income Tax Assessment Act 1936 . (4) The other company must be covered by an item of this table. The other company Item The other company must: At this time: 1 Be the * head company of a * consolidated group The end of the application year or, if the company ceases to be in existence during the application year, just before the cessation 2 Be the * head company of a * MEC group The end of the application year or, if the group ceases to exist during the application year because the company ceases to be in existence, just before the cessation 3 Not be a * member of a * consolidatable group The end of the application year or, if the company ceases to be in existence during the application year, just before the cessation

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 170-132 — Net capital loss made by the loss company because of a transfer under Subdivision 707 ‑ A

When the conditions in this section apply (1) The conditions in this section apply instead of the conditions in subsections 170 ‑ 130(1) and (2) if: (a) the gain company is an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank; and (b) the * loss company made the * net capital loss because of one or more transfers of the net capital loss under Subdivision 707 ‑ A. Conditions (2) Each transferor ( prior transferor ) of the * net capital loss under Subdivision 707 ‑ A must have been a company. (3) It must have been possible to meet the conditions in subsections 170 ‑ 130(1) and (2) in relation to the * loss company and the gain company assuming: (a) the capital loss year were so much of the income year in which the * net capital loss was transferred to the loss company under Subdivision 707 ‑ A as occurred after the transfer; and (b) so much (if any) of the application year as occurred before the transfer were disregarded. (4) The gain company and each prior transferor must both be in existence during at least part of each of these periods: (a) the period consisting of: (i) if the prior transferor made the * net capital loss apart from Subdivision 707 ‑ A—the capital loss year; or (ii) if the prior transferor made the net capital loss because of a transfer under Subdivision 707 ‑ A (other than a transfer from the prior transferor to itself)—so much of the income year in which the transfer occurred as was after the transfer (but before any later transfer of the loss from the prior transferor under that Subdivision); (b) so much of the income year during which the net capital loss was transferred under Subdivision 707 ‑ A from the prior transferor to another company as occurs before the transfer (but after the start of the period described in paragraph (a)); (c) any intervening income year. (5) The gain company must be a member of the same * wholly ‑ owned group as each prior transferor during the whole or part of the periods described in subsection (4) for the prior transferor when both were in existence.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 170-133 — Alternative test of relations between the loss company and other companies

(1) The conditions in subsections 170 ‑ 130(1) and (2) are taken to be met in relation to the * loss company and the gain 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 gain company is covered by item 1 or 2 of the table in subsection 170 ‑ 130(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 (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 capital loss year but before the time described in the item of the table in subsection 170 ‑ 130(4) that covers the gain company; (b) the * net capital loss could have been transferred from the * loss company to the first link company under this Subdivision (apart from subsection 170 ‑ 130(4) and this section) for an application 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 capital loss year; and (iii) the first link company had enough * capital gains for the trial year; (c) the net capital loss would have been made by the gain company because of one or more transfers under Subdivision 707 ‑ A assuming the net capital loss had been made by the first link company (apart from that Subdivision) for the capital loss year. (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 gain 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 * net capital loss would have been transferred under Subdivision 707 ‑ A to the other company as described in that paragraph; and (b) ending when the net capital loss would have been transferred under Subdivision 707 ‑ A from the other company as described in that paragraph. (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 gain company as well as the other company. (5) Another circumstance is that the conditions in subsection 170 ‑ 130(1) and (2) would have been met for the * loss company and the gain company assuming: (a) the capital loss year consisted of the part of the income year in which the * net capital loss would have been transferred to the gain 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 application year as occurred before the time the transfer would have occurred were disregarded.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 170-135 — The loss company

(1) The loss company: (a) must be an Australian resident (but not a * prescribed dual resident) throughout the capital loss year; and (b) must not be a * dual resident investment company in either the capital loss year or the application year. (2) It must be the case that the loss company was not required to calculate the * net capital loss: (a) under section 165 ‑ 114 (because of a change in ownership or control); or (b) under section 175 ‑ 75 (because of an injected capital gain or loss). (3) Also, it must be the case that neither Subdivision 165 ‑ CA nor Subdivision 175 ‑ CA would have prevented the loss company from applying the * net capital loss in working out its * net capital gain for the application year if it had made enough * capital gains in that year. Note 1: Subdivision 165 ‑ CA deals with the consequences of changing ownership or control of a company. Subdivision 175 ‑ CA deals with using a company’s net capital losses to avoid income tax. Note 2: Division 707 affects the operation of Subdivision 165 ‑ CA if the loss company made the net capital loss because of a transfer under Subdivision 707 ‑ A. Note 3: A company’s net capital gain or net capital loss for an income year is usually worked out under section 102 ‑ 5 or 102 ‑ 10.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-140 — The gain company

(1) The gain company must be an Australian resident throughout the application year. (2) If the capital loss year and the application year are not the same, the gain company must not be prevented by Subdivision 165 ‑ CA or 175 ‑ CA from applying the transferred amount in working out its * net capital gain for the application year. Note 1: Subdivision 165 ‑ CA deals with the consequences of changing ownership or control of a company. Subdivision 175 ‑ CA deals with using a company’s net capital losses to avoid income tax. Note 2: A company’s net capital gain or net capital loss for an income year is usually worked out under section 102 ‑ 5 or 102 ‑ 10. Note 3: The condition in subsection (2) may not apply in some cases. See section 170 ‑ 142. (3) If the capital loss year and the application year are the same, it must be the case that the gain company was not required to calculate its own * net capital gain or * net capital loss for the application year: (a) under Subdivision 165 ‑ CB (because of a change in ownership or control); or (b) under section 175 ‑ 75 (because of an injected capital gain or loss). Note: In deciding whether paragraph (b) applies, remember that the transferred amount is taken to be a capital loss of the gain company for the application year (because of subsection 170 ‑ 120(2)).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 170-142 — If the gain company has become the head company of a consolidated group or MEC group

(1) The condition in subsection (2) of this section applies to the gain company instead of the condition in subsection 170 ‑ 140(2) if the conditions in subsections 170 ‑ 130(1) and (2) are met in relation to the * loss company and the gain company apart from section 170 ‑ 133 and either: (a) both these circumstances exist: (i) after the start of the capital loss year but before the relevant time described in subsection 170 ‑ 130(4), the gain company became the * head company of a * consolidated group or of a * MEC group that came into existence after the start of the capital loss year; (ii) the capital loss year and application year are not the same; or (b) all these circumstances exist: (i) the gain company is, at the relevant time described in subsection 170 ‑ 130(4), the head company of a MEC group; (ii) before that time but after the end of the capital loss year, the MEC group was involved in an application event described in section 719 ‑ 300 (but not covered by subsection 719 ‑ 300(4) or (5)); (iii) the gain company would be taken under section 719 ‑ 305 to have transferred losses to itself under Subdivision 707 ‑ A, assuming it had made losses while head company of the group or of a consolidated group involved in the event; (iv) the MEC group or consolidated group came into existence before the start of the capital loss year. Note: An application event involves either expanding an existing MEC group by including extra eligible tier ‑ 1 companies of the top company for the group or creating a MEC group because more companies become eligible tier ‑ 1 companies of the top company of which the head company of a consolidated group is an eligible tier ‑ 1 company. (2) The gain company must have been able to apply the * net capital loss in working out its * net capital gain for the application year assuming that it had made the net capital loss for the capital loss year. (3) The condition in subsection (4) of this section applies to the gain company instead of the condition in subsection 170 ‑ 140(2) if the conditions in subsections 170 ‑ 130(1) and (2) are met in relation to the * loss company and the gain company because of section 170 ‑ 133. (4) The gain company must have been able to apply the * net capital loss in working out its * net capital gain for the application year assuming that it had made the net capital loss, for the income year in which the loss would have been transferred to it as described in paragraph 170 ‑ 133(2)(c), because of one or more transfers under Subdivision 707 ‑ A described in that paragraph.

Amendment history: Inserted by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-145 — Maximum amount that can be transferred

Loss company can only transfer what it cannot use itself (1) The amount transferred cannot exceed what would be the amount of the * loss company’s * unutilised * net capital loss at the end of the application year if the loss company utilised the net capital loss to the greatest extent possible. Note: If the capital loss year and the application year are the same, the whole of the net capital loss would be unutilised, because section 102 ‑ 5 does not allow a net capital loss to be applied in the income year in which it was made. Example: In the application year the loss company has: • a net capital loss from an earlier income year of $25,000; and • other capital losses totalling $10,000; and • capital gains totalling $20,000; Of the $25,000 loss, the loss company can transfer to the gain company no more than: Transferred loss must not exceed what the gain company can use (5) No amount can be transferred if, apart from the operation of this section, the gain company would not have a * net capital gain for the application year. (6) The amount transferred also cannot exceed the amount worked out as follows: Method statement Step 1. Work out what, apart from the operation of this section, would have been the gain company’s * net capital gain for the application year. Step 2. Subtract each amount that: (a) the gain company can apply under section 170 ‑ 115 in working out its * net capital gain for the application year; and (b) was transferred to the gain company (by the loss company or any other company) by an agreement made before the agreement by which the first amount is transferred. Example: In the application year: • the gain company has capital gains totalling $60,000 and capital losses totalling $25,000; and • another company, being a member of the same wholly ‑ owned group as the gain company, transferred a net capital loss of $15,000 to the gain company; and • the loss company incurred a net capital loss of $50,000. Of the $50,000 loss, the loss company can transfer to the gain company no more than: (7) Subsection (6) does not apply if the transfer occurs because either or both of the conditions in subsections 170 ‑ 142(2) and (4) are met. In that case, the amount transferred also cannot exceed the amount worked out as follows: Method statement Step 1. Identify each * bundle of losses that, on the assumption in subsection 170 ‑ 142(2) or (4) (as appropriate), would have included the * net capital loss. Note 1: There will be 2 or more bundles of losses identified if both of the conditions in subsections 170 ‑ 142(2) and (4) are met. Note 2: There will be more than 1 bundle of losses identified on the basis of the assumption in paragraph 170 ‑ 142(4) if the conditions in subsections 170 ‑ 130(1) and (2) are met in relation to the loss company and the gain company because of multiple applications of section 170 ‑ 133 each involving a different first link company. Step 2. For each * bundle identified, work out how much of the * net capital loss the gain company would have been able to apply in working out its * net capital gain for the application year assuming that: (a) the loss could have been applied in that year only after the application in that year of any other losses of that * sort that would have been included in the bundle, other than losses (the transferable losses ) that could be transferred from the * loss company to the gain company for that year; and (b) if the bundle would have included 2 or more transferable losses of that sort—those losses could have been applied only in the order in which the loss company made them. Note 1: If the assumption in subsection 170 ‑ 142(2) is relevant to the bundle, it would have included losses made by the gain company and transferred (or taken to be transferred) to the company (from itself) under Subdivision 707 ‑ A. Note 2: If the assumption in paragraph 170 ‑ 142(4) is relevant to the bundle, it would have included losses actually made by the first link company and transferred (by one or more transfers under Subdivision 707 ‑ A) to the gain company. Step 3. Total every result of step 2 for the * net capital loss.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11) | Amended by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15)

s 170-150 — Transfer by written agreement

(1) The transfer must be made by a written agreement between the loss company and the gain company. (2) The agreement must: (a) specify the income year of the transfer (which may be earlier than the income year in which the agreement is made); and (b) specify the amount of the * net capital loss being transferred; and (c) be signed by the public officer of each company; and (d) be made on or before the day of lodgment of the gain company’s * income tax return for the application year, or within such further time as the Commissioner allows. Note: The agreement will usually be made in the next income year after the one for which the gain company will apply the loss.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 170-155 — Losses must be transferred in order they are made

(1) If the loss company has 2 or more * net capital losses that it can transfer in the application year, it can transfer them only in the order in which it made them. (2) If: (a) the * loss company has 2 or more * net capital losses it can transfer for the application year; and (b) it made at least one of those losses apart from Subdivision 707 ‑ A and at least one of those losses because of a transfer under that Subdivision; it can transfer under this Subdivision the losses it made because of a transfer under Subdivision 707 ‑ A only after transferring under this Subdivision the losses it made apart from that Subdivision. (3) For the purposes of subsection (2), treat a loss made by the company both apart from Subdivision 707 ‑ A and because of a transfer under that Subdivision as a loss made because of a transfer under that Subdivision. (4) Subsection (1) has effect subject to subsection (2).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 117 of 2002, effective s 4: 2 Dec 2002 (s 2(1) item 1) Sch 1, 2, Sch 3 (items 1–7), Sch 4, Sch 5 (items 1–12), Sch 6–8, Sch 11 (items 8–11), Sch 12 (items 1–23), Sch 13 (items 1–14) and Sch 14 (items 8–13): 24 Oct 2002 (s 2(1) items 2, 3, 5, 6, 9) Sch 17: 29 June 2002 (s 2(1) item 11)

s 170-160 — Gain company cannot transfer transferred net capital loss

The gain company cannot transfer an amount of a * net capital loss transferred to it, or any part of the amount.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 170-165 — Agreement transfers as much as can be transferred

(1) If the amount specified in an agreement exceeds the maximum amount that the loss company can transfer to the gain company in the application year, only that maximum amount is taken to have been transferred. (2) One reason why an agreement might specify more than can be transferred is that an assessment has been amended since the agreement.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 170-170 — Amendment of assessments

The Commissioner may amend an assessment to * disallow a transferred amount of a * net capital loss: (a) if the agreement to transfer the net capital loss is ineffective because the loss company did not actually make the loss; or (b) to the extent that section 170 ‑ 165 reduces the transferred amount because the loss company did not actually make some of it. The Commissioner may do so despite section 170 (Amendment of assessments) of the Income Tax Assessment Act 1936 . Note: This Subdivision is disregarded in calculating the attributable income of a CFC: see section 410 of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 170-174 — Treatment like Australian branches of foreign banks

(1) The object of this section is to let * net capital losses be transferred under this Subdivision to and from * Australian permanent establishments of * foreign entities that are * financial entities in the same way as net capital losses can be transferred to and from Australian branches of * foreign banks. (2) This Subdivision (except this section) applies to an * Australian permanent establishment of a * foreign entity that is a * financial entity in the same way as this Subdivision applies to an Australian branch (as defined in Part IIIB of the Income Tax Assessment Act 1936 ) of a * foreign bank.

Amendment history: Inserted by No 64 of 2005, effective Schedule 2: 27 June 2005 Schedule 5: 29 June 2004 Remainder: Royal Assent

s 170-201 — What this Subdivision is about

If a tax loss or a net capital loss is transferred between companies in the same wholly ‑ owned group, this Subdivision provides for adjustments to: (a) the cost base and reduced cost base of direct and indirect equity interests held by group companies in the loss company, or in the income company or gain company; and (b) the reduced cost base of direct and indirect debt interest held by group companies in the loss company; and (c) the cost base and reduced cost base of direct and indirect debt interests held by group companies in the income company or gain company. Table of sections Operative provisions 170 ‑ 205 Object of Subdivision 170 ‑ 210 Transfer of tax loss: direct and indirect interests in the loss company 170 ‑ 215 Transfer of tax loss: direct and indirect interests in the income company 170 ‑ 220 Transfer of net capital loss: direct and indirect interests in the loss company 170 ‑ 225 Transfer of net capital loss: direct and indirect interests in the gain company

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 170-205 — Object of Subdivision

Interests in the loss company (1) The main object of this Subdivision is to ensure that, if an amount of a * tax loss or * net capital loss is transferred by a company to another company in the same * wholly ‑ owned group, the loss transferred is not duplicated by a member of the group. (2) Duplication could occur by the making of a * capital loss, or the reduction of a * capital gain, from a * CGT event that happens in relation to an equity interest held (directly or indirectly) in the loss company or by the making of a capital loss in relation to a debt interest held (directly or indirectly) in the loss company. Interests in the income company or gain company (3) This Subdivision may also require an adjustment to the cost base and reduced cost base of an equity or debt interest held (directly or indirectly) by a group company in the income company or gain company. (4) This adjustment is to reflect an increase in the * market value of the interest because of the transfer of the loss if the increase is still reflected in the market value of the interest when a * CGT event happens in relation to the interest.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 170-210 — Transfer of tax loss: direct and indirect interests in the loss company

(1) If: (a) an amount of a * tax loss is transferred by a company to another company; and (b) Subdivision 170 ‑ A applies in respect of the transfer; and (c) a company (the group company ) holds a * share in the loss company or is owed a debt by the loss company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) throughout the deduction year, the group company is a member of the same * wholly ‑ owned group as the loss company (disregarding a period when either was not in existence); and (f) a * CGT event happens in relation to the share or debt on or after the commencement of this section; and (g) the relevant agreement referred to in section 170 ‑ 50 is made on or after that commencement; the * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced in accordance with subsection (3). (2) If: (a) an amount of a * tax loss is transferred by a company to another company; and (b) Subdivision 170 ‑ A applies in respect of the transfer; and (c) a company (the group company ) holds a * share in another company or is owed a debt by another company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) the money that the group company paid for the share, or the borrowed money, has been applied (directly, or indirectly through one or more interposed entities): (i) in the other company or a third company acquiring shares in the loss company; or (ii) in a * borrowing by the loss company from the other company or from a third company; and (f) throughout the deduction year, the group company, the other company and the third company (if any) are all members of the same * wholly ‑ owned group as the loss company (disregarding, for a particular company, a period when it was not in existence); and (g) a * CGT event happens in relation to the share or debt on or after the commencement of this section; and (h) the relevant agreement referred to in section 170 ‑ 50 is made on or after that commencement; the * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced in accordance with subsection (3). (3) The * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced by an amount that is appropriate having regard to: (aa) the main object of this Subdivision and other matters mentioned in subsections 170 ‑ 205(1) and (2); and (a) the group company’s direct or indirect interest in the loss company; and (ba) any reduction in the reduced cost base made under Subdivision 165 ‑ CD; and (b) the amount of the loss transferred; and (c) the extent to which the loss reduced the * market value of the share or debt; and (d) any consideration received by the loss company for the loss transferred; and (e) whether, because of a dividend or dividends paid by the loss company, the consideration is no longer reflected (wholly or partly) in the market value of the share or debt when a * CGT event happens in relation to it. (3A) To avoid doubt in applying paragraph (3)(c) in relation to a * share or debt, if factors other than the loss altered the * market value of the share or debt, the extent to which the loss reduced that market value is taken to be the extent to which that market value would have been reduced apart from those other factors. Note: An example of a factor other than the loss is the unrealised value of assets (including assets in respect of which there is an unrealised gain) of the loss company, whether or not generated by outlays or economic losses reflected in the loss for income tax purposes. (3B) This section applies to a * tax loss only to the extent that the loss represents an outlay or loss of any of the economic resources of the * loss company. Note: Where the income tax law allows, as all or part of a loss, an amount for the decline in value of a depreciating asset that exceeds the actual economic depreciation or depletion of the asset concerned, the excess is not to be regarded for the purposes of this subsection as representing an outlay or loss of economic resources of the company. (4) Any reduction is to be made immediately before a * CGT event happens in relation to the share or debt and is to have effect from that time or the end of the deduction year, whichever is the earlier. Note 1: For deduction year see subsection 170 ‑ 20(1). Note 2: Subsection (4) is relevant for indexing elements of a cost base (see sections 114 ‑ 1 and 114 ‑ 15).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 170-215 — Transfer of tax loss: direct and indirect interests in the income company

(1) If: (a) an amount of a * tax loss is transferred by a company to another company; and (b) Subdivision 170 ‑ A applies in respect of the transfer; and (c) a company (the group company ) holds a * share in the income company or is owed a debt by the income company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) throughout the deduction year, the group company is a member of the same * wholly ‑ owned group as the income company (disregarding a period when either was not in existence); and (f) a * CGT event happens in relation to the share or debt on or after the commencement of this section; and (g) the relevant agreement referred to in section 170 ‑ 50 is made on or after that commencement; and (h) there are shares in, or debts owed by, the * loss company the * reduced cost base of at least one of which has been reduced by subsection 170 ‑ 210(1) or (2); the * cost base and * reduced cost base of the share or debt are increased in accordance with subsection (3). (2) If: (a) an amount of a * tax loss is transferred by a company to another company; and (b) Subdivision 170 ‑ A applies in respect of the transfer; and (c) a company (the group company ) holds a * share in another company or is owed a debt by another company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) the money that the group company paid for the share, or the borrowed money, has been applied (directly, or indirectly through one or more interposed entities): (i) in the other company or a third company acquiring shares in the income company; or (ii) in a * borrowing by the income company from the other company or from a third company; and (f) throughout the deduction year, the group company, the other company and the third company (if any) are all members of the same * wholly ‑ owned group as the income company (disregarding, for a particular company, a period when it was not in existence); and (g) a * CGT event happens in relation to the share or debt on or after the commencement of this section; and (h) the relevant agreement referred to in section 170 ‑ 50 is made on or after that commencement; and (i) there are shares in, or debts owed by, the * loss company the * reduced cost base of at least one of which has been reduced by subsection 170 ‑ 210(1) or (2); the * cost base and * reduced cost base of the share or debt are increased in accordance with subsection (3). (3) The * cost base and * reduced cost base are increased by an amount that is appropriate having regard to: (aa) the matters mentioned in subsections 170 ‑ 205(3) and (4); and (ab) the amounts of any reductions to the cost base and reduced cost base of * shares, and to the reduced cost base of debts, under subsection 170 ‑ 210(3); and (a) the group company’s direct or indirect interest in the income company; and (b) the amount of the loss transferred; and (c) any consideration given by the income company for the loss transferred. Note: This is because the consideration may be less than the commercial value of the loss transferred. (4) However, the increase cannot exceed the increase in the * market value of the * share or debt that results from the transfer of the loss. (If no increase in that market value results, for example because the consideration paid for the transfer of the loss equals the commercial value of the loss transferred, then there is no increase in the * cost base and * reduced cost base.) (4A) No increase is to be made to the extent that the * tax loss transferred does not represent an outlay or loss of any of the economic resources of the company that transferred the tax loss. Note: Where the income tax law allows, as all or part of a loss, an amount for the decline in value of a depreciating asset that exceeds the actual economic depreciation or depletion of the asset concerned, the excess is not to be regarded for the purposes of this subsection as representing an outlay or loss of economic resources of the company. (5) Any increase is to be made immediately before a * CGT event happens in relation to the share or debt and is to have effect from that time or the end of the deduction year, whichever is the earlier. Note: This subsection is relevant for indexing elements of a cost base (see sections 114 ‑ 1 and 114 ‑ 15). (6) No increase is to be made to the * cost base and * reduced cost base of a share or debt to the extent to which, because of a dividend or dividends paid by the income company, the increase in the * market value of the share or debt that resulted from the transfer of the loss is no longer in existence at the time when a * CGT event happens in relation to the share or debt. Note: For deduction year see subsection 170 ‑ 20(1).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 170-220 — Transfer of net capital loss: direct and indirect interests in the loss company

(1) If: (a) an amount of a * net capital loss is transferred by a company to another company; and (b) Subdivision 170 ‑ B applies in respect of the transfer; and (c) a company (the group company ) holds a * share in the loss company or is owed a debt by the loss company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) throughout the application year, the group company is a member of the same * wholly ‑ owned group as the loss company (disregarding a period when either was not in existence); and (f) the relevant agreement referred to in section 170 ‑ 150 is made on or after the commencement of this section; the * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced in accordance with subsection (3). (2) If: (a) an amount of a * net capital loss is transferred by a company to another company; and (b) Subdivision 170 ‑ B applies in respect of the transfer; and (c) a company (the group company ) holds a * share in another company or is owed a debt by another company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) the money that the group company paid for the share, or the borrowed money, has been applied (directly, or indirectly through one or more interposed entities): (i) in the other company or a third company acquiring shares in the loss company; or (ii) in a * borrowing by the loss company from the other company or from a third company; and (f) throughout the application year, the group company, the other company and the third company (if any) are all members of the same * wholly ‑ owned group as the loss company (disregarding, for a particular company, a period when it was not in existence); and (g) the relevant agreement referred to in section 170 ‑ 150 is made on or after the commencement of this section; the * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced in accordance with subsection (3). (3) The * cost base and * reduced cost base of the share or the reduced cost base of the debt is reduced by an amount that is appropriate having regard to: (aa) the main object of this Subdivision and other matters mentioned in subsections 170 ‑ 205(1) and (2); and (a) the group company’s direct or indirect interest in the loss company; and (ba) any reduction in the reduced cost base made under Subdivision 165 ‑ CD; and (b) the amount of the loss transferred; and (c) the extent to which the loss reduced the * market value of the share or debt; and (d) any consideration received by the loss company for the loss transferred; and (e) whether, because of a dividend or dividends paid by the loss company, the consideration is no longer reflected (wholly or partly) in the market value of the share or debt when a * CGT event happens in relation to it. (3A) To avoid doubt in applying paragraph (3)(c) in relation to a * share or debt, if factors other than the loss altered the * market value of the share or debt, the extent to which the loss reduced that market value is taken to be the extent to which that market value would have been reduced apart from those other factors. Note: An example of a factor other than the loss is the unrealised value of assets (including assets in respect of which there is an unrealised gain) of the loss company, whether or not generated by outlays or economic losses reflected in the loss for income tax purposes. (3B) This section applies to a * net capital loss only to the extent that the loss represents an outlay or loss of any of the economic resources of the * loss company. Note: Where the income tax law allows, as all or part of a loss, an amount for the decline in value of a depreciating asset that exceeds the actual economic depreciation or depletion of the asset concerned, the excess is not to be regarded for the purposes of this subsection as representing an outlay or loss of economic resources of the company. (4) Any reduction is to be made immediately before a * CGT event happens in relation to the share or debt and is to have effect from that time or the end of the application year, whichever is the earlier. Note 1: Subsection (4) is relevant for indexing elements of a cost base (see sections 114 ‑ 1 and 114 ‑ 15). Note 2: Reductions under former subsection 160ZP(13) of the Income Tax Assessment Act 1936 are also relevant: see section 170 ‑ 220 of the Income Tax (Transitional Provisions) Act 1997 . Note 3: For applicable year see subsection 170 ‑ 115(1).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 170-225 — Transfer of net capital loss: direct and indirect interests in the gain company

(1) If: (a) an amount of a * net capital loss is transferred by a company to another company; and (b) Subdivision 170 ‑ B applies in respect of the transfer; and (c) a company (the group company ) holds a * share in the gain company or is owed a debt by the gain company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) throughout the application year, the group company is a member of the same * wholly ‑ owned group as the gain company (disregarding a period when either was not in existence); and (f) the relevant agreement referred to in section 170 ‑ 150 is made on or after the commencement of this section; and (g) there are shares in, or debts owed by, the * loss company the * cost base and * reduced cost base of at least one of which have been reduced by subsection 170 ‑ 220(1) or (2); the * cost base and * reduced cost base of the share or debt are increased in accordance with subsection (3). (2) If: (a) an amount of a * net capital loss is transferred by a company to another company; and (b) Subdivision 170 ‑ B applies in respect of the transfer; and (c) a company (the group company ) holds a * share in another company or is owed a debt by another company in respect of a loan; and (d) the group company * acquired the share or debt on or after 20 September 1985; and (e) the money that the group company paid for the share, or the borrowed money, has been applied (directly, or indirectly through one or more interposed entities): (i) in the other company or a third company acquiring shares in the gain company; or (ii) in a * borrowing by the gain company from the other company or from a third company; and (f) throughout the application year, the group company, the other company and the third company (if any) are all members of the same * wholly ‑ owned group as the gain company (disregarding, for a particular company, a period when it was not in existence); and (g) the relevant agreement referred to in section 170 ‑ 150 is made on or after the commencement of this section; and (h) there are shares in, or debts owed by, the * loss company the * cost base and * reduced cost base of at least one of which have been reduced by subsection 170 ‑ 220(1) or (2); the * cost base and * reduced cost base of the share or debt are increased in accordance with subsection (3). (3) The * cost base and * reduced cost base are increased by an amount that is appropriate having regard to: (aa) the matters mentioned in subsections 170 ‑ 205(3) and (4); and (ab) the amounts of any reductions to the cost base and reduced cost base of * shares, and to the reduced cost base of debts, under subsection 170 ‑ 220(3); and (a) the group company’s direct or indirect interest in the gain company; and (b) the amount of the loss transferred; and (c) any consideration given by the gain company for the loss transferred. Note: This is because the consideration may be less than the commercial value of the loss transferred. (4) However, the increase cannot exceed the increase in the * market value of the * share or debt that results from the transfer of the loss. (If no increase in that market value results, for example because the consideration paid for the transfer of the loss equals the commercial value of the loss transferred, then there is no increase in the * cost base and * reduced cost base.) (4A) No increase is to be made to the extent that the * net capital loss transferred does not represent an outlay or loss of any of the economic resources of the company that transferred the net capital loss. Note: Where the income tax law allows, as all or part of a loss, an amount for the decline in value of a depreciating asset that exceeds the actual economic depreciation or depletion of the asset concerned, the excess is not to be regarded for the purposes of this subsection as representing an outlay or loss of economic resources of the company. (5) Any increase is to be made immediately before a * CGT event happens in relation to the share or debt and is to have effect from that time or the end of the application year, whichever is the earlier. Note: This subsection is relevant for indexing elements of a cost base (see sections 114 ‑ 1 and 114 ‑ 15). (6) No increase is to be made to the * cost base and * reduced cost base of a share or debt to the extent to which, because of a dividend or dividends paid by the gain company, the increase in the * market value of the share or debt that resulted from the transfer of the loss is no longer in existence at the time when a * CGT event happens in relation to the share or debt. Note: Increases under former subsections 160ZP(14) and (15) of the Income Tax Assessment Act 1936 are also relevant: see section 170 ‑ 225 of the Income Tax (Transitional Provisions) Act 1997 .

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 77 of 2001, effective Sch 2 (items 149–476, 488): 30 June 2001 (s 2(1)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent

s 170-250 — What this Subdivision is about

This Subdivision provides that there is a deferral of a * capital loss or deduction if a company (the originating company ) that is a member of a * linked group disposes of a * CGT asset to, or creates a CGT asset in, another entity that: (a) is a company that is also a member of the linked group; or (b) is a connected entity of the originating company or an * associate of such a connected entity; and the disposal or creation of the asset would have resulted in the originating company making a capital loss or becoming entitled to a deduction. Table of sections Operative provisions 170 ‑ 255 Application of Subdivision 170 ‑ 260 Linked group 170 ‑ 265 Connected entity 170 ‑ 270 Immediate consequences for originating company 170 ‑ 275 Subsequent consequences for originating company 170 ‑ 280 What happens if certain events happen in respect of the asset

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1))

s 170-255 — Application of Subdivision

(1) This Subdivision applies if: (a) an event (the deferral event ) happens involving a company (the originating company ) and another entity; and (b) one or more of the following apply: (i) the deferral event is a * CGT event that would have resulted in the originating company making a * capital loss (except a capital loss that would be disregarded under a provision of this Act other than this Subdivision); (ii) the deferral event would have resulted in the originating company becoming entitled to a deduction in respect of the disposal of a CGT asset or of an interest in a CGT asset; (iii) if the originating company is a partner in a partnership—the deferral event would have resulted in the partnership becoming entitled to a deduction in respect of the disposal of a CGT asset or of an interest in a CGT asset; and (c) if subparagraph (b)(i) applies—the CGT event is one of the following: (i) CGT events A1 and B1 (a disposal case ); (ii) CGT events D1, D2, D3 and F1 (a creation case ); and Note: The full list of CGT events is in section 104 ‑ 5. (d) one of the following applies: (i) the originating company is an Australian resident at the time of the deferral event; (ii) if the deferral event is a CGT event D1—the * CGT asset that is the subject of the creation of the contractual or other rights is * taxable Australian property; (iii) if the deferral event is a CGT event A1, B1 or F1—the asset or the subject of the lease, as the case may be, was * taxable Australian property immediately before the deferral event; (iv) if the deferral event is a CGT event D2—the option was taxable Australian property immediately after the deferral event; (v) if subparagraph (b)(ii) or (iii) applies—the originating company is a foreign resident at the time of the deferral event; and (e) at the time of the deferral event, the originating company is a member of a * linked group and one of the following applies: (i) the other entity is a company that is not a connected entity of the originating company and is a member of that linked group; (ii) the other entity is a connected entity of the originating company; (iii) the other entity is an * associate of such a connected entity. (2) Despite subsection (1): (a) this Subdivision does not apply because of * CGT event B1 if title in the * CGT asset does not pass to the other entity when the agreement ends; and (b) this Subdivision does not apply if the deferral event involves the * acquisition of a greater than 50% interest in a CGT asset by an entity other than an entity referred to in subparagraph (1)(e)(i), (ii) or (iii).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 168 of 2006, effective Schedule 3 (items 3–5): 13 Dec 2005 Remainder: Royal Assent

s 170-260 — Linked group

(1) Companies that are linked to one another are a linked group . (2) Two companies are linked to each other if: (a) one of them has a controlling stake in the other; or (b) the same entity has a controlling stake in each of them. (3) For the purposes of this section, an entity has a controlling stake in a company at a particular time if the entity, or the entity and the entity’s * associates between them: (a) are able at that time to exercise, or control the exercise of, more than 50% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or (b) have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any dividends that the company may pay; or (c) have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any distribution of capital of the company. Note: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (4) If: (a) apart from this subsection, an interest that gives an entity and its * associates (if any): (i) the ability to exercise, or control the exercise of, any of the voting power in a company; or (ii) the right to receive dividends that a company may pay; or (iii) the right to receive a distribution of capital of a company; would, in the application of paragraph (3)(a), (b) or (c), be counted more than once; and (b) the interest is both direct and indirect; only the direct interest is to be counted.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 170-265 — Connected entity

(1) An entity is a connected entity of the originating company at a particular time if, at that time: (a) the entity is a trustee of a trust and either: (i) if the trust is a * fixed trust—one or more companies that are members of the * linked group of which the originating company is a member, or one or more of those companies and their * associates, between them have the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any distribution to beneficiaries of the trust of income or corpus of the trust; or (ii) if the trust is not a fixed trust—any company that is a member of the linked group of which the originating company is a member or any associate of such a company benefits or is capable of benefiting under the trust; or (b) the entity is an individual who has a controlling stake in the company. (2) For the purposes of paragraph (1)(b), an individual has a controlling stake in a company at a particular time if the individual, or the individual and his or her * associates between them: (a) are able at that time to exercise, or control the exercise of, more than 50% of the voting power in the company (either directly, or indirectly through one or more interposed entities); or (b) have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any dividends that the company may pay; or (c) have at that time the right to receive for their own benefit (either directly, or indirectly through one or more interposed entities) more than 50% of any distribution of capital of the company. Note: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters. (3) If: (a) apart from this subsection, an interest that gives an entity and its * associates (if any): (i) the ability to exercise, or control the exercise of, any of the voting power in a company; or (ii) the right to receive dividends that a company may pay; or (iii) the right to receive a distribution of capital of a company; would, in the application of paragraph (2)(a), (b) or (c), be counted more than once; and (b) the interest is both direct and indirect; only the direct interest is to be counted.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11)) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 170-270 — Immediate consequences for originating company

(1) If, apart from this Subdivision: (a) the originating company would have made a * capital loss (except a capital loss that would be disregarded under a provision of this Act other than this Subdivision) as a result of the deferral event; or (b) the originating company would have become entitled to a deduction in respect of the deferral event; or (c) where the originating company is a partner in a partnership—the partnership would have become entitled to a deduction in respect of the deferral event; the capital loss, the deduction or the partner’s share of the deduction, as the case may be, is disregarded. (2) To avoid doubt, the amount of the * capital loss, deduction, or partnership deduction, referred to in this section is: (a) the amount remaining after applying Division 723 or section 727 ‑ 615; or (b) nil, if none of the amount remains after applying that section or Division. Note: Division 723 and section 727 ‑ 615 reduce a loss realised for income tax purposes by a realisation event happening to a non ‑ depreciating asset (in the case of Division 723) or an affected interest in a losing entity under an indirect value shift (in the case of section 727 ‑ 615).

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 90 of 2002, effective s 4, Sch 1–6, 12, Sch 14 (items 1–15, 17–19), Sch 15 (items 1, 3–15, 19–89) and Sch 16 (items 1, 21–55): 24 Oct 2002 (s 2(1) items 1, 2, 4, 5) Sch 13: 29 June 2002 (s 2(1) item 3)

s 170-275 — Subsequent consequences for originating company

(1) If, at a time after the deferral event, any one or more of the following events (the new events ) happens: (a) the * CGT asset * acquired by the other entity referred to in paragraph 170 ‑ 255(1)(a) (the relevant CGT asset ), or a greater than 50% interest in it, ceases to exist; (b) the relevant CGT asset, or a greater than 50% interest in it, is acquired by an entity that is none of the following: (i) a member of the * linked group of which the originating company is a member; (ii) a connected entity of the originating company; (iii) an * associate of such a connected entity; (c) if the relevant CGT asset is acquired by a company that is a member of that linked group—that company ceases to be a member of that linked group; (d) the originating company ceases to be a member of that linked group; (e) if the relevant CGT asset is acquired by an entity that is a connected entity of the originating company or is an associate of such a connected entity—that entity ceases to be such a connected entity or ceases to be an associate of such a connected entity, as the case may be; the originating company is taken, immediately before the time of the happening of the new event or the earliest of the new events, as the case may be, to have made a * capital loss equal to the amount of the capital loss referred to in section 170 ‑ 270 or to have become entitled to a deduction equal to the deduction, or the share of the deduction, referred to in that section, as the case may be. (2) If the * capital loss referred to in section 170 ‑ 270 would have been made from a * personal use asset or from a * collectable, any corresponding capital loss that the originating company is taken by subsection (1) of this section to have made is taken to have been made from a personal use asset or from a collectable, as the case may be.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 170-280 — What happens if certain events happen in respect of the asset

(1) This section applies if, as a result of the occurrence of a new event in respect of a * CGT asset, the originating company is taken by subsection 170 ‑ 275(1) to have made a * capital loss or to be entitled to a deduction and, within 4 years after the occurrence of the new event, one of the following events ( further events ) occurs: (a) the asset or a greater than 50% interest in it is * acquired by the originating company or by an entity that, at the time of the acquisition, is: (i) a company that is a member of the * linked group of which the originating company is a member; or (ii) a connected entity of the originating company; or (iii) an * associate of such a connected entity; (b) a company that owns the asset or a greater than 50% interest in it becomes a member of the linked group of which the originating company is a member; (c) the originating company becomes a member of a linked group another member of which owns the asset or a greater than 50% interest in it; (d) an entity that owns the asset or a greater than 50% interest in it becomes: (i) a connected entity of the originating company; or (ii) an associate of such a connected entity. (1A) If the originating company has information from which it would be reasonable to conclude that, if the * CGT asset involved were owned by the originating company immediately after the further event, * majority underlying interests in the asset immediately after the further event would not have been had by * ultimate owners who had majority underlying interests in the asset immediately before the deferral event, the further event is taken not to have occurred. (2) The company is taken not to have made the * capital loss or not to have been entitled to the deduction, as the case may be. (3) If, at a time after the further event, any one or more of the following events (the realisation events ) happens: (a) the * CGT asset referred to in subsection (1) (the relevant CGT asset ), or a greater than 50% interest in it, ceases to exist; (b) the relevant CGT asset, or a greater than 50% interest in it, is * acquired by an entity that is none of the following: (i) a member of the linked group of which the originating company is a member; (ii) a connected entity of the originating company; (iii) an * associate of such a connected entity; (c) if the relevant CGT asset is acquired by a company that is a member of that linked group—that company ceases to be a member of that linked group; (d) the originating company ceases to be a member of that linked group; (e) if the relevant CGT asset is acquired by an entity that is a connected entity of the originating company or is an associate of such a connected entity—that entity ceases to be such a connected entity or ceases to be an associate of such a connected entity, as the case may be; the originating company is taken, immediately before the time of the happening of the realisation event or the earliest of the realisation events, as the case may be , to have made a * capital loss equal to the amount of the capital loss referred to in subsection (2) or to have become entitled to a deduction equal to the deduction referred to in that subsection, as the case may be. (4) If the * capital loss referred to in subsection (2) would have been made from a * personal use asset or from a * collectable, any corresponding capital loss that the originating company is taken by subsection (3) to have made is taken to have been made from a personal use asset or from a collectable, as the case may be.

Amendment history: Inserted by No 169 of 1999, effective Sch 5 (items 1–12): 22 Feb 1999 (s 2(2)) Sch 1 (items 1–13, 18), Sch 2 (items 1–3, 5), Sch 3 (items 1–4, 7), Sch 4 (items 1–15, 19), Sch 6, Sch 7 (item 11), Sch 8, Sch 9 (items 1–14, 23–33) and Sch 10: 10 Dec 1999 (s 2(1)) | Amended by No 89 of 2000, effective s 4, Sch 1 (items 1–17, 19–25, 30–32, 34–65, 65A, 68), Sch 2 (items 63–66, 69, 71–79, 79A, 79B, 80–83, 83A, 84), Sch 4, Sch 5 (items 1–31, 34), Sch 6 and Sch 9 (items 5, 9, 26, 43, 55–57, 62, 63, 66, 67): 30 June 2000 (s 2(1)) Sch 1 (item 18): 1 pm (A.C.T.) 11 Nov 1999 (s 2(2)) Sch 1 (items 26–29, 33): 31 May 2000 (s 2(3)) Sch 2 (items 67, 68, 70): 1 July 2001 (s 2(5)) Sch 9 (items 1–4, 6–8, 10–25, 27–42, 44–54, 58–61, 64, 65, 68–73): 1 July 2000 (s 2(11))

s 175-1 — What this Division is about

The Commissioner can reverse the effect of schemes that, in order to avoid tax, bring together in the same company:  assessable income; and  tax losses, current year deductions, or deductions for bad debts, that apart from the scheme would not be fully used.

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 175-5 — When Commissioner can disallow deduction for tax loss

(1) This Subdivision sets out cases where the Commissioner may disallow some or all of a * tax loss (or of part of a tax loss) (the excluded loss ) as a deduction in calculating a company’s taxable income of an income year after the * loss year. (2) However, the Commissioner cannot disallow the * excluded loss if the company: (a) fails to meet a condition in section 165 ‑ 12 (which is about the company maintaining the same owners) in respect of the * loss year or the income year; but (b) meets the condition in section 165 ‑ 13 in respect of the income year by satisfying the * business continuity test under section 165 ‑ 210.

Amendment history: Amended by No 16 of 1998, effective s 4, Sch 3–5, Sch 10 (items 1–19) and Sch 11: 16 Apr 1998 (s 2(1)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 175-10 — First case: income or capital gain injected into company because of available tax loss

(1) The Commissioner may disallow the * excluded loss if, during the income year, the company * derived assessable income, or a * capital gain accrued to the company, some or all of which (the injected amount ) would not have been derived, or would not have accrued, if the excluded loss had not been available to be taken into account for the purposes of: • Division 36 (which is about tax losses of earlier years); • Division 165 (which is about the income tax consequences of changing ownership or control of a company); • former Subdivision 375 ‑ G (which is about film losses). (2) However, the Commissioner cannot disallow the * excluded loss if the * continuing shareholders will benefit from the derivation or accrual of the * injected amount to an extent that the Commissioner thinks fair and reasonable having regard to their respective rights and interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow an excluded loss of an insolvent company. (3) The continuing shareholders are: (a) all of the persons who had * more than 50% of the voting power in the company during the whole (or the relevant part) of the * loss year and during the whole of the income year; and (b) all of the persons who had rights to * more than 50% of the company’s dividends during the whole (or the relevant part) of the loss year and during the whole of the income year; and (c) all of the persons who had rights to * more than 50% of the company’s capital distributions during the whole (or the relevant part) of the loss year and during the whole of the income year. To find out who they were, apply whichever tests are applied in order to determine whether the company can deduct the * tax loss (or the part of the tax loss) in the first place. Note 1: See section 165 ‑ 12 (which is about the company maintaining the same owners). Note 2: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

Amendment history: Amended by No 147 of 1997, effective s 4 and Sch 2 (items 2–7): 14 Oct 1997 (s 2(1)) Sch 6 (items 10–13): 1 July 1997 (s 2(3)) Sch 14 (items 43–60): 1 July 1997 (s 2(7)) Sch 15 (items 7–13): 1 July 1997 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 175-15 — Second case: someone else obtains a tax benefit because of tax loss available to company

(1) The Commissioner may disallow the * excluded loss if: (a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the excluded loss had not been available to be taken into account for the purposes of: • Division 36 (which is about tax losses of earlier years); • Division 165 (which is about the income tax consequences of changing ownership or control of a company); • former Subdivision 375 ‑ G (which is about film losses). (2) However, the Commissioner cannot disallow the * excluded loss if: (a) the person had a * shareholding interest in the company at some time during the income year; and (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest. Note: Section 175 ‑ 100 allows the Commissioner to disallow an excluded loss of an insolvent company. (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9)

s 175-20 — Income or capital gain injected into company because of available deductions

(1) The Commissioner may disallow deductions of a company (or parts of them) for an income year if: (a) the company has * derived assessable income, or a * capital gain accrued to the company, some or all of which (the injected amount ) would not have been derived, or would not have accrued, if the company did not have those deductions; and (b) the income was derived, or the capital gain accrued, in that income year. The disallowed deductions and parts of deductions may exceed the * injected amount. Note: The disallowance may result in a tax loss for the income year. See section 175 ‑ 35. (2) The Commissioner cannot disallow the deductions or parts of the deductions if the * continuing shareholders will benefit from the derivation of the * injected amount to an extent that the Commissioner thinks fair and reasonable having regard to their respective * shareholding interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company. (3) The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * injected amount was * derived, and immediately afterwards.

Amendment history: Amended by No 147 of 1997, effective s 4 and Sch 2 (items 2–7): 14 Oct 1997 (s 2(1)) Sch 6 (items 10–13): 1 July 1997 (s 2(3)) Sch 14 (items 43–60): 1 July 1997 (s 2(7)) Sch 15 (items 7–13): 1 July 1997 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-25 — Deduction injected into company because of available income or capital gain

(1) The Commissioner may disallow a deduction of a company for an income year to the extent that the company would not have incurred the loss, outgoing or expenditure that the deduction is for if it had not * derived some or all of the assessable income it derived in that income year, or had not made some or all of a * capital gain it made in that income year. Note: The disallowance may result in a tax loss for the income year. See section 175 ‑ 35. (2) The Commissioner cannot disallow any of the deduction if: (a) the * continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss, outgoing or expenditure being incurred; and (b) the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective * shareholding interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow a deduction of an insolvent company. (3) The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the loss, outgoing or expenditure was incurred, and immediately afterwards.

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-30 — Someone else obtains a tax benefit because of a deduction, income or capital gain available to company

(1) The Commissioner may disallow a deduction of a company if: (a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the company had not incurred some or all (the available expense ) of the loss, outgoing or expenditure that the deduction is for. However, the deduction may be disallowed only to the extent of the available expense. (2) The Commissioner may disallow deductions of a company (or parts of them) if: (a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if some or all (the available amount ) of the assessable income that the company * derived or of a * capital gain that accrued to the company: (i) before it incurred the losses, outgoings or expenditure that the deductions were for; and (ii) in the same income year as it incurred them; had not been derived or had not accrued, as the case may be. The disallowed deductions and parts of deductions may exceed the available amount. Note: The disallowance may result in a tax loss for the income year. See section 175 ‑ 35. (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 . (4) The Commissioner cannot disallow under this section if: (a) the person who has obtained or will obtain the tax benefit had a * shareholding interest in the company at some time during the income year; and (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest. Note: Section 175 ‑ 100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.

Amendment history: Amended by No 147 of 1997, effective s 4 and Sch 2 (items 2–7): 14 Oct 1997 (s 2(1)) Sch 6 (items 10–13): 1 July 1997 (s 2(3)) Sch 14 (items 43–60): 1 July 1997 (s 2(7)) Sch 15 (items 7–13): 1 July 1997 (s 2(9)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-35 — Tax loss resulting from disallowed deductions

(1) If a company has a taxable income for an income year because the Commissioner disallows under this Subdivision deductions of the company for the income year (or parts of them), the company may also have a * tax loss for the income year. (2) The company’s tax loss for the income year is calculated as follows. (3) Total what the Commissioner has disallowed under this Subdivision. (4) If the company has * exempt income for the income year, subtract its * net exempt income. (5) Any amount remaining is the company’s tax loss for the income year, which is called a loss year . Note: The meanings of tax loss and loss year are modified by section 36 ‑ 55 for a corporate tax entity that has an amount of excess franking offsets. To find out how much of the tax loss can be deducted in later income years: see Subdivision 165 ‑ A. To find out how to deduct it: see section 36 ‑ 17.

Amendment history: Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 142 of 2003, effective s 4, Sch 1 (items 1–15, 18–40), Sch 2 (items 1, 2, 4–29, 33–49, 52, 53), Sch 3, Sch 7 (items 1–23) and Sch 8 (items 4–17, 17A, 17B, 18–21, 24(2), (3)): 17 Dec 2003 (s 2(1) items 1–5, 10, 11, 13)

s 175-40 — When Commissioner can disallow net capital loss of earlier income year

(1) This Subdivision sets out cases where the Commissioner may prevent a company, in working out its * net capital gain for an income year, from applying some or all of a * net capital loss it has for an earlier income year (or of part of one) (the excluded loss ). This is called disallowing the excluded loss. Note: A company’s net capital gain for an income year is usually worked out under section 102 ‑ 5. (2) However, the Commissioner cannot * disallow the * excluded loss if, in determining (under section 165 ‑ 96) whether Subdivision 165 ‑ A would prevent the company from deducting the loss (or the part of the loss) for the income year if the loss were a * tax loss of the company for that earlier income year, the company: (a) would fail to meet a condition in section 165 ‑ 12 (which is about the company maintaining the same owners) in respect of the income year; but (b) would meet the condition in section 165 ‑ 13 in respect of the income year by satisfying the * business continuity test under section 165 ‑ 210. Note: Subdivision 165 ‑ A deals with the deductibility of a company’s tax loss for an earlier income year if there has been a change in the ownership or control of the company in the period from the start of the loss year to the end of the income year.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 175-45 — First case: capital gain injected into company because of available net capital loss

(1) The Commissioner may * disallow the * excluded loss if, during the income year, the company made a * capital gain some or all of which (the injected capital gain ) it would not have made if the excluded loss had not been available to be applied in working out the company’s * net capital gain for the income year (or for some other income year). (2) However, the Commissioner cannot * disallow the * excluded loss if the * continuing shareholders will benefit from the making of the injected capital gain to an extent that the Commissioner thinks fair and reasonable having regard to their respective rights and interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow an excluded loss of an insolvent company. (3) The continuing shareholders are: (a) all of the persons who had * more than 50% of the voting power in the company during the whole (or the relevant part) of the earlier income year and during the whole of the income year; and (b) all of the persons who had rights to * more than 50% of the company’s dividends during the whole (or the relevant part) of the earlier income year and during the whole of the income year; and (c) all of the persons who had rights to * more than 50% of the company’s capital distributions during the whole (or the relevant part) of the earlier income year and during the whole of the income year. To find out who they were, apply whichever tests are applied in order to determine (under section 165 ‑ 96) whether Subdivision 165 ‑ A would prevent the company from deducting the loss for the current year if it were a * tax loss of the company for that earlier income year. Note 1: See section 165 ‑ 12 (which is about the company maintaining the same owners). Note 2: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 175-50 — Second case: someone else obtains a tax benefit because of net capital loss available to company

(1) The Commissioner may * disallow the * excluded loss if: (a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the excluded loss had not been available to be applied in working out the company’s * net capital gain for the income year (or for some other income year). (2) However, the Commissioner cannot * disallow the * excluded loss if: (a) the person had a * shareholding interest in the company at some time during the income year; and (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest. Note: Section 175 ‑ 100 allows the Commissioner to disallow an excluded loss of an insolvent company. (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-55 — When Commissioner can disallow capital loss of current year

This Subdivision sets out cases where the Commissioner may prevent a company, in working out its * net capital gain or * net capital loss for an income year, from applying all or part of a * capital loss it made during the income year. This is called disallowing the capital loss or part.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 175-60 — Capital gain injected into company because of available capital loss

(1) The Commissioner may * disallow * capital losses of a company (or parts of them) for an income year if: (a) the company has made a * capital gain some or all of which (the injected capital gain ) it would not have made if it did not have those capital losses; and (b) the injected capital gain was made in that income year. 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 income year: see section 175 ‑ 75. (2) The Commissioner cannot * disallow the * capital losses or parts of the capital losses if the * continuing shareholders will benefit from the making 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. Note: Section 175 ‑ 100 allows the Commissioner to disallow capital losses or parts of capital losses of an insolvent company. (3) The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * injected capital gain was made, and immediately afterwards.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-65 — Capital loss injected into company because of available capital gain

(1) The Commissioner may * disallow a * capital loss of a company for an income year to the extent that the company would not have made the loss if it had not also made some or all of a * capital gain it made in that income year. Note: The disallowance may result in a tax loss for the income year: see section 175 ‑ 75. (2) The Commissioner cannot * disallow any of the * capital loss if: (a) the * continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss being made; and (b) the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective * shareholding interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow a capital loss of an insolvent company. (3) The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * capital loss was made, and immediately afterwards.

Amendment history: Repealed and substituted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-70 — Someone else obtains a tax benefit because of capital loss or gain available to company

(1) The Commissioner may * disallow a * capital loss of a company if: (a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital loss ) of the capital loss. However, the capital loss may be disallowed only to the extent of the available capital loss. (2) The Commissioner may * disallow * capital losses of a company (or parts of them) if: (a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital gains ) of the * capital gains it made: (i) before it made the capital losses; and (ii) in the same income year as it made them. The disallowed capital losses and parts of capital losses may exceed the amount of the available capital gains. Note: The disallowance may result in a tax loss for the income year: see section 175 ‑ 75. (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 . (4) The Commissioner cannot * disallow under this section if: (a) the person who has obtained or will obtain the tax benefit had a * shareholding interest in the company at some time during the income year; and (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest. Note: Section 175 ‑ 100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-75 — Net capital loss resulting from disallowed capital losses

If a company has a * net capital gain for an income year because the Commissioner * disallows under this Subdivision * capital losses of the company for the income year (or parts of them), the company also has a net capital loss for the income year equal to the total of those losses and parts of losses. To find out how much of the net capital loss can be applied in later income years: see Subdivision 165 ‑ CA. To find out how to apply it: see sections 102 ‑ 5 and 102 ‑ 15.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 175-80 — When Commissioner can disallow deduction for bad debt

(1) This Subdivision sets out cases where the Commissioner may disallow some or all of a deduction for a debt (or part of a debt) that is owed to a company and is written off as bad in the income year. (2) However, the Commissioner cannot disallow any of the deduction if the company: (a) fails to meet a condition in section 165 ‑ 123 (about the company maintaining the same owners) in respect of the * first continuity period or the * second continuity period; but (b) meets the condition in section 165 ‑ 126 by satisfying the * business continuity test under section 165 ‑ 210.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 114 of 2000, effective Schedule 4 (items 43, 44): 1 July 1998 Remainder: Royal Assent | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 164 of 2007, effective s. 4, Schedule 1 (items 1–24, 36–67, 71), Schedules 2–6, Schedule 7 (items 1–3, 5–12, 14), Schedule 8 (items 6–13), Schedule 9 and Schedule 10 (items 1, 7–25, 91, 92): Royal Assent Schedule 10 (items 57–88): 1 July 2010 Sch 12 (items 72–87): 27 Sept 2007 (s 2(1) item 9) | Amended by No 7 of 2019, effective Sch 1 (items 1–13, 33–164): 1 Apr 2019 (s 2(1) item 1)

s 175-85 — First case: income or capital gain injected into company because of available bad debt

(1) The Commissioner may disallow some or all of the deduction if the company would not have had some or all (the injected amount ) of its assessable income or * capital gains for the income year if: (a) the debt had not been incurred; and (b) the debt (or the relevant part of the debt) had not been written off (or able to be written off) as bad. (2) However, the Commissioner cannot disallow any of the deduction if the * continuing shareholders will benefit from the company having the injected amount to an extent that the Commissioner thinks fair and reasonable having regard to their respective rights and interests in the company. Note: Section 175 ‑ 100 allows the Commissioner to disallow some or all of a deduction of an insolvent company. (3) The continuing shareholders are: (a) all of the persons who had * more than 50% of the voting power in the company throughout the * first continuity period and the * second continuity period; and (b) all of the persons who had rights to * more than 50% of the company’s dividends throughout the * first continuity period and the * second continuity period; and (c) all of the persons who had rights to * more than 50% of the company’s capital distributions throughout the * first continuity period and the * second continuity period. To find out who they were, apply whichever tests are applied in order to determine whether the company can deduct the debt (or the relevant part of the debt) in the first place. Note 1: See section 165 ‑ 123 (about the company maintaining the same owners). Note 2: Division 167 has special rules for working out rights to voting power, dividends and capital distributions in a company whose shares do not all carry the same rights to those matters.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 130 of 2015, effective s 4, Sch 1 (items 1–3, 5–21) and Sch 3 (items 1–5): 16 Sept 2015 (s 2(1) items 1, 2, 4) Sch 2: 1 July 2015 (s 2(1) item 3) Sch 4 (items 1–52, 54–58): 17 Sept 2015 (s 2(1) item 5)

s 175-90 — Second case: someone else obtains a tax benefit because of bad debt deduction available to company

(1) The Commissioner may disallow some or all of the deduction if: (a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and (b) the scheme would not have been entered into or carried out if the debt had not been incurred and the debt (or the relevant part of the debt) had not been written off (or able to be written off) as bad. (2) However, the Commissioner cannot disallow any of the deduction if: (a) the person had a * shareholding interest in the company at some time during the income year; and (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest. Note: Section 175 ‑ 100 allows the Commissioner to disallow some or all of a deduction of an insolvent company. (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent

s 175-95 — When a person has a shareholding interest in the company

(1) A person has a shareholding interest in the company if the person is: (a) the beneficial owner; or (b) the trustee of a * family trust who is the owner; of: (c) * shares in the company; or (d) an interest in * shares in the company. (2) A person also has a shareholding interest in the company if: (a) the person has a shareholding interest in another company; and (b) the other company has a shareholding interest in the company (including one resulting from any other application or applications of this subsection).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13))

s 175-100 — Commissioner may disallow excluded losses etc. of insolvent companies

Despite a subsection listed in column 1, the Commissioner may, under a subsection listed in column 2, disallow some or all of an * excluded loss, deduction, or * capital loss, of a company (as the case requires) if: (a) the company is or becomes: (i) a Chapter 5 body corporate within the meaning of the Corporations Act 2001 ; or (ii) an entity with a similar status under a * foreign law to a Chapter 5 body corporate; and (b) the company is insolvent (within the meaning of section 9 of the Corporations Act 2001 ) when the company becomes an entity mentioned in subparagraph (a)(i) or (ii). Commissioner may disallow excluded losses etc. for insolvent companies Item Column 1 Despite this subsection... Column 2 the Commissioner may disallow under this subsection: 1 Subsection 175 ‑ 10(2) Subsection 175 ‑ 10(1) 2 Subsection 175 ‑ 15(2) Subsection 175 ‑ 15(1) 3 Subsection 175 ‑ 20(2) Subsection 175 ‑ 20(1) 4 Subsection 175 ‑ 25(2) Subsection 175 ‑ 25(1) 5 Subsection 175 ‑ 30(4) Subsection 175 ‑ 30(1) or (2) 6 Subsection 175 ‑ 45(2) Subsection 175 ‑ 45(1) 7 Subsection 175 ‑ 50(2) Subsection 175 ‑ 50(1) 8 Subsection 175 ‑ 60(2) Subsection 175 ‑ 60(1) 9 Subsection 175 ‑ 65(2) Subsection 175 ‑ 65(1) 10 Subsection 175 ‑ 70(4) Subsection 175 ‑ 70(1) or (2) 11 Subsection 175 ‑ 85(2) Subsection 175 ‑ 85(1) 11 Subsection 175 ‑ 90(2) Subsection 175 ‑ 90(1)

Amendment history: Inserted by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 11 of 2016, effective Sch 2 (items 274–277): 1 Mar 2017 (s 2(1) item 5) | Amended by No 127 of 2021, effective Sch 1 and Sch 3 (items 42, 49–63, 65–69, 71, 72): 1 Jan 2022 (s 2(1) items 2, 5) Sch 2 (item 56) and Sch 3 (items 3–5, 33–35): 8 Dec 2021 (s 2(1) items 3, 4)

s 180-1 — What this Division is about

If a company would only avoid the tax consequences of Division 165 or 175 because of interests held by a foreign resident family trust, the Commissioner may require the company to give certain information about the family trust. If it is not given, the company does not avoid the tax consequences of that Division.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Repealed and substituted by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 180-5 — Information about family trusts with interests in companies

Notice about company (1) The Commissioner may give a company a notice in accordance with section 180 ‑ 10 if the requirements of this section are met. Tax detriment under Division 165 (2) In its * income tax return for an income year: (a) the company must have deducted a * tax loss from a * loss year where it would not be allowed to deduct the tax loss if it did not meet the conditions in section 165 ‑ 12; or (b) the company must not have calculated: (i) its taxable income and tax loss under Subdivision 165 ‑ B; and (ii) its * net capital gain and * net capital loss under Subdivision 165 ‑ CB; where it would have been required to calculate them under that Subdivision if it did not satisfy the requirements of paragraph 165 ‑ 35(a); or (c) the company must have applied a * net capital loss from an earlier income year in working out its net capital gain where it would not have been allowed to apply the loss if it did not meet the condition in section 165 ‑ 12 as applied on the assumption mentioned in subsection 165 ‑ 96(1); or (d) the company must have deducted a debt that it wrote off as bad in the income year where it would not be allowed to deduct the debt if it did not satisfy the requirements of paragraph 165 ‑ 120(1)(a) or (b). Role of family trust (3) The Commissioner must be satisfied that the company: (a) if paragraph (2)(a) applies—meets the conditions in section 165 ‑ 12; or (b) if paragraph (2)(b) applies—satisfies the requirements of paragraph 165 ‑ 35(a); or (c) if paragraph (2)(c) applies—meets the conditions in section 165 ‑ 12 as applied on the assumption mentioned in subsection 165 ‑ 96(1); or (d) if paragraph (2)(d) applies—satisfies the requirements of paragraph 165 ‑ 120(1)(a) or (b); but it would not do so unless one or more trusts were * family trusts. Foreign resident trust (4) When the Commissioner gives the notice, for at least one of the * family trusts: (a) a trustee of the trust must be a foreign resident; or (b) the central management and control of the trust must be outside Australia. When notice must be given (5) The Commissioner must give the notice before the later of: (a) 5 years after the income year to which the return relates; and (b) the end of the period during which the company is required by section 262A of the Income Tax Assessment Act 1936 to retain records in relation to that income year.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16) | Amended by No 147 of 2005, effective Schedule 1 (items 4–168, 169(2), 170–176), Schedule 2 (items 1, 12–24, 26–28), Schedule 3, Schedule 4 (items 4–12), Schedule 5 (items 13, 14, 20), Schedule 6 (items 1, 2, 10(1)) and Schedule 7 (items 14–16, 20): Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5)

s 180-10 — Notice where requirements of section 180 ‑ 5 are met

Information required (1) The notice that the Commissioner may give if the requirements of section 180 ‑ 5 are met must require the company to give the Commissioner specified information about conferrals of present entitlements to, and distributions (within the meaning of Subdivision 272 ‑ B in Schedule 2F to the Income Tax Assessment Act 1936 ) of, income and capital, since the start of: (a) if paragraph 180 ‑ 5(2)(a) applies—the * loss year mentioned in that paragraph; or (b) if paragraph 180 ‑ 5(2)(b) applies—the income year for which that paragraph is being applied; or (c) if paragraph 180 ‑ 5(2)(c) applies—the earlier income year mentioned in that paragraph; or (d) if paragraph 180 ‑ 5(2)(d) applies: (i) where the debt mentioned in that paragraph was incurred in an earlier income year—the day on which the debt was incurred; or (ii) where the debt mentioned in that paragraph was incurred in the income year mentioned in that paragraph—that income year; by all of the * family trusts meeting the requirements of paragraph 180 ‑ 5(4)(a) or (b). Company knowledge (2) The information need not be within the knowledge of the company at the time the notice is given. Period for giving information (3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice. Consequence of not giving the information (4) If the company does not give the information within the period or within such further period as the Commissioner allows: (a) if paragraph 180 ‑ 5(2)(a) applies—the company is not entitled, and is taken never to have been entitled, to deduct the * tax loss; or (b) if paragraph 180 ‑ 5(2)(b) applies—the company is required, and taken always to have been required: (i) to calculate its taxable income and tax loss for the income year under Subdivision 165 ‑ B; and (ii) to calculate its * net capital gain and * net capital loss for the income year under Subdivision 165 ‑ CB; or (c) if paragraph 180 ‑ 5(2)(c) applies—the company is not entitled, and is taken never to have been entitled, to apply the net capital loss; or (d) if paragraph 180 ‑ 5(2)(d) applies—the company is not entitled, and is taken never to have been entitled, to deduct the debt. (5) If, because of paragraph (4)(b), the company is required to calculate under Subdivision 165 ‑ B its taxable income and * tax loss for the income year concerned, that Subdivision is to be applied as if it required the income year to be divided into such periods as would result in the highest possible taxable income for the income year. (6) If, because of paragraph (4)(b), the company is required to calculate under Subdivision 165 ‑ CB its * net capital gain and * net capital loss for the income year concerned, that Subdivision is to be applied as if it required the income year to be divided into such periods as would result in the highest net capital gain for the income year. No offences or penalties (7) To avoid doubt, subsections (4) to (6) do not cause the company to commit any offence or be liable to any penalty under Part 4 ‑ 25 in Schedule 1 to the Taxation Administration Act 1953 for: (a) deducting the * tax loss; or (b) not calculating its taxable income and tax loss under Subdivision 165 ‑ B as it applies in accordance with subsection (5) of this section; or (c) not calculating its * net capital gain and * net capital loss under Subdivision 165 ‑ CB as it applies in accordance with subsection (6) of this section; or (d) applying the net capital loss; or (e) deducting the debt; in the company’s * income tax return.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 180-15 — Information about family trusts with interests in companies

Notice about company (1) The Commissioner may give a company a notice in accordance with section 180 ‑ 20 if the requirements of this section are met. Tax detriment under Division 175 (2) The Commissioner: (a) must have been prevented by subsection 175 ‑ 10(2) or 175 ‑ 15(2) from disallowing, as a deduction for an income year, the whole or part of a * tax loss from a * loss year; or (b) must have been prevented by subsection 175 ‑ 20(2), 175 ‑ 25(2) or 175 ‑ 30(4) from disallowing the whole or part of a deduction for an income year; or (c) must have been prevented by subsection 175 ‑ 45(2) or 175 ‑ 50(2) from disallowing, in working out the * net capital gain or * net capital loss for an income year, the whole or part of a * net capital loss for an earlier income year (or a part of one); or (d) must have been prevented by subsection 175 ‑ 60(2), 175 ‑ 65(2) or 175 ‑ 70(4) from disallowing, in working out its net capital gain or net capital loss for an income year, the whole or part of a * capital loss made during the income year; or (e) must have been prevented by subsection 175 ‑ 85(2) or 175 ‑ 90(2) from disallowing, as a deduction for an income year, the whole or part of a debt. Role of family trust (3) A * family trust must have been: (a) one of the * continuing shareholders mentioned in subsection 175 ‑ 10(2), 175 ‑ 20(2), 175 ‑ 25(2), 175 ‑ 45(2), 175 ‑ 60(2), 175 ‑ 65(2) or 175 ‑ 85(2); or (b) the person who had the * shareholding interest mentioned in subsection 175 ‑ 15(2), 175 ‑ 30(4), 175 ‑ 50(2), 175 ‑ 70(4) or 175 ‑ 90(2); as the case requires. Foreign resident trust (4) When the Commissioner gives the notice: (a) a trustee of the * family trust must be a foreign resident; or (b) the central management and control of the * family trust must be outside Australia. When notice must be given (5) The Commissioner must give the notice before the later of: (a) 5 years after the income year mentioned in subsection (2); and (b) the end of the period during which the company is required by section 262A of the Income Tax Assessment Act 1936 to retain records in relation to that income year.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 41 of 2005, effective s. 4, Schedule 1 (items 1–11), Schedule 2 (items 1–9, 11), Schedule 3 (items 17–22), Schedule 6 (items 1–3, 5, 12–15, 17–28), Schedule 7, Schedule 10 (items 36–221, 271–273) and Schedule 11 (items 4, 5): Royal Assent Sch 10 (item 247): 28 Dec 2002 (s 2(1) item 9) Sch 10 (items 248, 259, 260): 24 Oct 2002 (s 2(1) items 10, 14, 15) Sch 10 (items 249, 250–257, 263, 264): 29 June 2002 (s 2(1) items 11, 12, 17) Sch 10 (item 258): 30 June 2000 (s 2(1) item 13) Sch 10 (items 261, 262): 1 July 2000 (s 2(1) item 16)

s 180-20 — Notice where requirements of section 180 ‑ 15 are met

Information required (1) The notice that the Commissioner may give if the requirements of section 180 ‑ 15 are met must require the company to give the Commissioner specified information about conferrals of present entitlements to, and distributions (within the meaning of Subdivision 272 ‑ B in Schedule 2F to the Income Tax Assessment Act 1936 ) of, income and capital by the * family trust since the start of: (a) the * loss year mentioned in paragraph 180 ‑ 15(2)(a); or (b) the income year mentioned in paragraph 180 ‑ 15(2)(b) or (d); or (c) the earlier income year mentioned in paragraph 180 ‑ 15(2)(c); or (d) if the debt mentioned in paragraph 180 ‑ 15(2)(e) was incurred in the income year mentioned in that paragraph—that income year; or (e) if the debt mentioned in paragraph 180 ‑ 15(2)(e) was incurred in an earlier income year than the one mentioned in that paragraph—the day on which the debt was incurred. Company knowledge (2) The information need not be within the knowledge of the company at the time the notice is given. Period for giving information (3) The notice must specify a period within which the company is to give the information. The period must not end earlier than 21 days after the day on which the Commissioner gives the notice. Consequence of not giving the information (4) If the company does not give the information within the period or within such further period as the Commissioner allows: (a) subsection 175 ‑ 10(2), 175 ‑ 15(2), 175 ‑ 20(2), 175 ‑ 25(2), 175 ‑ 30(4), 175 ‑ 85(2) or 175 ‑ 90(2) does not prevent the Commissioner from disallowing the deduction; or (b) subsection 175 ‑ 45(2) or 175 ‑ 50(2) does not prevent the Commissioner from * disallowing the * net capital loss; or (c) subsection 175 ‑ 60(2), 175 ‑ 65(2) or 175 ‑ 70(4) does not prevent the Commissioner from * disallowing the * capital loss; as the case requires. No offences or penalties (5) To avoid doubt, subsection (4) does not cause the company to commit any offence or be liable to any penalty under Part 4 ‑ 25 in Schedule 1 to the Taxation Administration Act 1953 for claiming the deduction, or applying the * net capital loss or * capital loss, in the company’s * income tax return.

Amendment history: Inserted by No 58 of 2000, effective s 4, Sch 2 (items 2–4(2)), Sch 5, Sch 6 (items 1–13, 17, 18, 20–32, 34), Sch 9 and Sch 10 (items 12–17(3)–(6), 31–38(3)–(7)): 31 May 2000 (s 2(1)) Sch 4: 17 Dec 1999 (s 2(8)) Sch 6 (items 14–16): never commenced (s 2(10)) Sch 6 (item 19): 16 July 1999 (s 2(11)) Sch 8 (item 19): 1 July 1998 (s 2(13)) | Amended by No 101 of 2006, effective Schedules 3 and 4: 1 Jan 2008 Remainder: Royal Assent | Amended by No 97 of 2008, effective Sch 1 (items 3–12) and Sch 3 (items 44–173, 189): 3 Oct 2008 (s 2(1) items 2, 3–5) | Amended by No 41 of 2011, effective Schedule 1 (items 1–3): 1 Jan 2011 Schedule 1 (items 4–6) and Schedule 5 (items 25–29, 33, 36–50, 74–78, 80–145, 148–167, 173–175, 383–396, 400, 414–418): Royal Assent Schedule 5 (items 9, 18–20): 28 June 2011 Schedule 5 (items 51–54): 1 July 2011

s 195-1 — What this Subdivision is about

This Subdivision contains rules about the income tax treatment of:  pooled development funds (PDFs)  shares in PDFs. Table of sections Working out a PDF’s taxable income and tax loss 195 ‑ 5 Deductibility of PDF tax losses 195 ‑ 10 PDF cannot transfer tax loss 195 ‑ 15 Tax loss for year in which company becomes a PDF Working out a PDF’s net capital gain and net capital loss 195 ‑ 25 Applying a PDF’s net capital losses 195 ‑ 30 PDF cannot transfer net capital loss 195 ‑ 35 Net capital loss for year in which company becomes a PDF Working out a PDF’s loss carry back tax offset 195 ‑ 37 PDF cannot carry back tax loss

Amendment history: Amended by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 195-5 — Deductibility of PDF tax losses

If a company is a * PDF at the end of an income year for which it has a * tax loss, it can deduct the tax loss in a later income year only if it is a PDF throughout the later income year.

s 195-10 — PDF cannot transfer tax loss

If a company is a * PDF at the end of an income year for which it has a * tax loss, it cannot transfer any amount of the tax loss under Subdivision 170 ‑ A (which is about the transfer of tax losses within certain wholly ‑ owned groups of companies).

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2)

s 195-15 — Tax loss for year in which company becomes a PDF

(1) This section applies if a company becomes a * PDF during an income year and is still a PDF at the end of it. (2) Divide the income year into periods as follows: (a) the non ‑ PDF period is the period beginning at the start of the income year and ending when the company becomes a * PDF; (b) the PDF period is the rest of the income year. (3) For each period, work out whether the company has a taxable income or a * tax loss (or both), treating each period as if it were an income year. (4) If the company has: (a) a taxable income for the non ‑ PDF period; and (b) a * tax loss for the PDF period; that tax loss is a tax loss of the company for the income year. Note: The company can only deduct the tax loss while it is a PDF: see section 195 ‑ 5. (5) If the company has a * tax loss for the non ‑ PDF period: (a) section 195 ‑ 5 does not prevent the company from deducting its tax loss for the income year in a later income year; and (b) section 195 ‑ 10 does not prevent the company from transferring an amount of the tax loss under Subdivision 170 ‑ A (which is about the transfer of tax losses within certain wholly ‑ owned groups of companies); and (c) section 195 ‑ 37 does not prevent the company from * carrying back its tax loss for the purpose of working out the amount of the company’s * loss carry back tax offset for the 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 income year; to the extent that the tax loss does not exceed the tax loss for the non ‑ PDF period. (6) These rules apply in addition to the other rules about how * tax losses are applied or transferred. The other rules start in Division 36 (which is about tax losses of earlier income years).

Amendment history: Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2) | Amended by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Amended by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Amended by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-25 — Applying a PDF’s net capital losses

If a company is a * PDF at the end of an income year for which it has a * net capital loss, it can apply the loss in working out its * net capital gain for a later income year only if it is a PDF throughout the last day of the later income year.

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4))

s 195-30 — PDF cannot transfer net capital loss

If a company is a * PDF at the end of an income year for which it has a * net capital loss, it cannot transfer any amount of the loss under Subdivision 170 ‑ B (which is about the transfer of net capital losses within certain wholly ‑ owned groups of companies).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2)

s 195-35 — Net capital loss for year in which company becomes a PDF

(1) This section applies if a company becomes a * PDF during an income year and is still a PDF at the end of it. (2) Divide the income year into periods according to subsection 195 ‑ 15(2) (about working out the company’s tax loss for the income year). (3) For each period, work out whether the company has a * net capital gain or a * net capital loss (or both), treating each period as if it were an income year. (4) If the company has: (a) a * net capital gain for the non ‑ PDF period; and (b) a * net capital loss for the PDF period; that loss is a net capital loss of the company for the income year. Note: The company can only apply the loss while it is a PDF: see section 195 ‑ 25. (5) If the company has a * net capital loss for the non ‑ PDF period: (a) section 195 ‑ 25 does not prevent the company from applying its * net capital loss for the income year in working out its * net capital gain for a later income year; and (b) section 195 ‑ 30 does not prevent the company from transferring an amount of its net capital loss for the income year under Subdivision 170 ‑ B (which is about the transfer of net capital losses within certain wholly ‑ owned groups of companies); to the extent that its net capital loss for the income year does not exceed its net capital loss for the non ‑ PDF period. (6) These rules apply in addition to the other rules about how * net capital losses are applied or transferred. The other rules start in Division 102 (about net capital gains and losses).

Amendment history: Inserted by No 46 of 1998, effective s 4, Sch 1, Sch 2 (items 4–48), Sch 3 (items 3–12), Sch 4 (items 2–11), Sch 5 (items 3–5), Sch 6 (items 2–7), Sch 7 (items 2–11), Sch 9 (items 2–6, 8) and Sch 10: 22 June 1998 (s 2(1)–(4)) | Amended by No 68 of 2002, effective 24 Oct 2002 ( see s. 2)

s 195-37 — PDF cannot carry back tax loss

A company that: (a) has a * tax loss for an income year; and (b) is a * PDF at the end of the income year; cannot * carry back the loss to an earlier income year for the purposes of working out the amount of the company’s * loss carry back tax offset for the 2020 ‑ 21, 2021 ‑ 22 or 2022 ‑ 23 income year (the offset year ) unless the company is a PDF throughout the earlier income year and the offset year.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7) | Amended by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-60 — What this Subdivision is about

This Subdivision contains rules about the income tax treatment of limited partnerships that become, or cease to be, venture capital limited partnerships, early stage venture capital limited partnerships, Australian venture capital funds of funds or venture capital management partnerships. It also allows the Commissioner to determine how to take account of limited partnerships having income years of less than 12 months when they become, or cease to be, venture capital limited partnerships, early stage venture capital limited partnerships, Australian venture capital funds of funds or venture capital management partnerships. Table of sections Operative provisions 195 ‑ 65 Tax losses cannot be transferred to a VCLP, an ESVCLP, an AFOF or a VCMP 195 ‑ 70 Previous tax losses can be deducted after ceasing to be a VCLP, an ESVCLP, an AFOF or a VCMP 195 ‑ 72 Tax losses cannot be carried back to before ceasing to be a VCLP, an ESVCLP, an AFOF or a VCMP 195 ‑ 75 Determinations to take account of income years of less than 12 months

Amendment history: Inserted by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 78 of 2007, effective Schedule 7 (items 2–14): 1 July 2005 Schedule 8 (items 350–353): 19 Dec 2002 (s 2(1) item 7) Remainder: Royal Assent

s 195-65 — Tax losses cannot be transferred to a VCLP, an ESVCLP, an AFOF or a VCMP

A * limited partnership’s * tax loss for a * loss year cannot be deducted in a later income year during which the partnership is a * VCLP, an * ESVCLP, an * AFOF or a * VCMP.

Amendment history: Inserted by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 78 of 2007, effective Schedule 7 (items 2–14): 1 July 2005 Schedule 8 (items 350–353): 19 Dec 2002 (s 2(1) item 7) Remainder: Royal Assent

s 195-70 — Previous tax losses can be deducted after ceasing to be a VCLP, an ESVCLP, an AFOF or a VCMP

This Subdivision does not prevent a * limited partnership that has ceased to be a * VCLP, an * ESVCLP, an * AFOF or a * VCMP from deducting, in an income year, a * tax loss for a * loss year that occurred before the partnership was a VCLP, ESVCLP, AFOF or VCMP.

Amendment history: Inserted by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 78 of 2007, effective Schedule 7 (items 2–14): 1 July 2005 Schedule 8 (items 350–353): 19 Dec 2002 (s 2(1) item 7) Remainder: Royal Assent

s 195-72 — Tax losses cannot be carried back to before ceasing to be a VCLP, an ESVCLP, an AFOF or a VCMP

A * limited partnership’s * tax loss for a * loss year cannot be * carried back to an income year during which the partnership was a * VCLP, an * ESVCLP, an * AFOF or a * VCMP.

Amendment history: Inserted by No 88 of 2013, effective s 4, Sch 1 (items 1–18), Sch 3 and Sch 7 (items 200–210, 236–242): 28 June 2013 (s 2(1) items 1, 2, 5, 21, 26) Sch 1 (items 33, 34): 1 July 2013 (s 2(1) item 3) Sch 5 (items 1–5, 7–9) and Sch 6 (items 3–41, 50–65): 29 June 2013 (s 2(1) items 8, 9, 14) Sch 7 (items 1–4): 1 July 2012 (s 2(1) item 15) | Repealed by No 96 of 2014, effective Sch 1 (items 14–45, 122–124), Sch 2 (items 1, 14–40, 42, 43) and Sch 3–5: 30 Sept 2014 (s 2(1) item 2) Sch 8 (items 15–22, 26) and Sch 9 (items 21, 22, 24): 31 Dec 2016 (s 2(1) items 7, 9) | Inserted by No 92 of 2020, effective Sch 1 (items 18–21, 24): 15 Oct 2020 (s 2(1) item 4) Sch 1 (items 25–27): 1 July 2022 (s 2(1) item 5) Sch 2 (items 1–3, 16–35), Sch 3 (items 25–36, 40), Sch 4 (items 1–11, 14), Sch 5 (items 11–38, 56) and Sch 7 (items 5–8, 12–25): 1 Jan 2021 (s 2(1) item 7)

s 195-75 — Determinations to take account of income years of less than 12 months

(1) The Commissioner may, by legislative instrument, make a determination modifying the operation of one or more provisions of this Act in relation to limited partnerships whose accounting periods commence or end under section 18A of the Income Tax Assessment Act 1936 . (2) A determination can only be made in order to take account of the fact that such accounting periods are of less than 12 months’ duration.

Amendment history: Inserted by No 136 of 2002, effective Sch 1 (items 1, 5): 31 May 2000 (s 2(1) items 2, 4) Sch 1 (items 2–4, 6–27), Sch 2 (items 18–28), Sch 3 (items 2–18) and Sch 4 (items 1, 2): 19 Dec 2002 (s 2(1) items 3, 5, 6) | Amended by No 58 of 2006, effective s. 4, Schedules 1, 2, Schedule 3 (items 1–3, 7), Schedule 4, Schedule 5 (items 1–3) and Schedule 7 (items 51–113, 213–216, 257–263): Royal Assent Sch 7 (items 179–188): 1 July 2004 (s 2(1) item 15) Sch 7 (item 189): 5 July 1999 (s 2(1) item 16) Sch 7 (item 190): 30 June 2000 (s 2(1) item 17) Sch 7 (item 191): 24 Oct 2002 (s 2(1) item 18) Sch 7 (item 192): 30 June 2004 (s 2(1) item 19) Sch 7 (item 193): 22 Dec 1999 (s 2(1) item 20)

s 195-100 — What this Subdivision is about

The business, assets and liabilities of each sub ‑ fund of a CCIV are taken to constitute the trust estate of a separate trust (a CCIV sub ‑ fund trust), of which the CCIV is the trustee and the members of the sub ‑ fund are the beneficiaries. This Subdivision sets out further rules to facilitate the CCIV, and the sub ‑ fund and its members, being taxed on this basis, including: • modifications of the rules for determining whether the CCIV sub ‑ fund trust is a managed investment trust (under Division 275) and an attribution managed investment trust (under Division 276); and Note: These modifications also affect whether the trust is a withholding MIT under Subdivision 12 ‑ H in Schedule 1 to the Taxation Administration Act 1953 . • rules to support the application of Division 6 or 6C of Part III of the Income Tax Assessment Act 1936 , to the extent that Division applies to the trust; and • rules to support the application to the trust of relevant rules about trust losses and capital gains. Table of sections Operative provisions 195 ‑ 105 Effect of this Subdivision 195 ‑ 110 Each sub ‑ fund of a CCIV is taken to be a separate trust 195 ‑ 115 A CCIV sub ‑ fund trust is a unit trust 195 ‑ 120 Beneficiary of a CCIV sub ‑ fund trust has fixed entitlements to shares of income and capital of the trust 195 ‑ 123 How to work out the income of the trust estate of a CCIV sub ‑ fund trust for an income year 195 ‑ 125 When a beneficiary of a CCIV sub ‑ fund trust is presently entitled to trust income 195 ‑ 127 When a beneficiary of a CCIV sub ‑ fund trust has an individual interest in exempt income and non ‑ assessable non ‑ exempt income of the trust estate 195 ‑ 130 Application of Division 275 (managed investment trusts) to a CCIV sub ‑ fund trust 195 ‑ 135 Application of Division 276 (AMITs) to a CCIV sub ‑ fund trust 195 ‑ 140 Entry on Australian Business Register

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-105 — Effect of this Subdivision

(1) This Subdivision has effect for the purposes of all * taxation laws, to the exclusion of those laws as they would otherwise apply in relation to * CCIVs and their members (in their capacity as such). Note: Subsection (3) excludes some taxation laws from this subsection. (2) Without limiting the generality of subsection (1), the purposes referred to in that subsection include how * taxation laws apply in relation to other entities, in so far as that application is affected by the application of those laws in relation to * CCIVs and their members (in their capacity as such). Note: For example, in applying subsection 318(1) of the Income Tax Assessment Act 1936 to determine whether a CCIV is an associate of a natural person for the purposes of a provision affecting the income tax payable by that person: (a) paragraph 318(1)(d) of that Act (providing for when a trustee of a trust is an associate of the natural person) would apply; and (b) paragraph 318(1)(e) of that Act (providing for when a company is an associate of the natural person) would not apply. (3) Subsections (1) and (2) do not apply to the following * taxation laws: (a) the Foreign Acquisitions and Takeovers Act 1975 ; (b) legislative instruments made under that Act.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-110 — Each sub ‑ fund of a CCIV is taken to be a separate trust

(1) For each * sub ‑ fund of a * CCIV, the business, * assets and * liabilities of the sub ‑ fund are taken to constitute the trust estate of a separate trust, of which the CCIV is the trustee and the * members of the sub ‑ fund are the beneficiaries. (2) A trust that is taken to exist because of the application of subsection (1) to a * sub ‑ fund of a * CCIV is a CCIV sub ‑ fund trust . Note: The combined effect of this section and subsections 960 ‑ 100(2) and (3) is that a CCIV is a different entity in its capacity as trustee of each of its CCIV sub ‑ fund trusts. Because of subsection 195 ‑ 105(1), the tax treatment of the CCIV in those capacities excludes the tax treatment that would otherwise apply to the CCIV as a company. Also, the tax treatment of members of the CCIV is based on them being treated as beneficiaries of their respective CCIV sub ‑ fund trusts, to the exclusion of the tax treatment that would otherwise apply to them as members of a company. Example 1: CCIV A has only one sub ‑ fund (sub ‑ fund A). CCIV B has only one sub ‑ fund (sub ‑ fund B). CCIV A holds shares in CCIV B. The shares are referable to sub ‑ fund B. They are assets of sub ‑ fund A. In its capacity as trustee of the CCIV sub ‑ fund trust for sub ‑ fund A, CCIV A is a beneficiary of the CCIV sub ‑ fund trust for sub ‑ fund B. Example 2: A CCIV has 2 sub ‑ funds: sub ‑ fund A and sub ‑ fund B. As permitted by section 1230Q of the Corporations Act 2001 , the CCIV acquires, in respect of sub ‑ fund A, shares that are referable to sub ‑ fund B. The shares are assets of sub ‑ fund A. In its capacity as trustee of the CCIV sub ‑ fund trust for sub ‑ fund A, the CCIV is a beneficiary of the CCIV sub ‑ fund trust for sub ‑ fund B.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-115 — A CCIV sub ‑ fund trust is a unit trust

(1) A * CCIV sub ‑ fund trust is taken to be a unit trust. Note: One consequence of this subsection is that a CCIV sub ‑ fund trust can be a public unit trust if it meets the other tests in section 102P of the Income Tax Assessment Act 1936 . (2) The * shares that are * referable to the * sub ‑ fund are taken to be the units in the trust. (3) The rights, obligations and other characteristics attaching to a unit in the trust are taken to be the same, as nearly as practicable, as the rights, obligations and other characteristics attaching to the share that is taken to be that unit. Note: One consequence of this section is that if shares that are referable to the sub ‑ fund are listed for quotation in the official list of a stock exchange, the units in the sub ‑ fund trust that those shares are taken to be will likewise be taken to be listed in that official list. Examples of provisions to which this is relevant are: (a) paragraph 275 ‑ 20(2)(a) (widely ‑ held requirement for managed investment trusts) of this Act; and (b) paragraph 102P(1)(a) of the Income Tax Assessment Act 1936 (public unit trusts).

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-120 — Beneficiary of a CCIV sub ‑ fund trust has fixed entitlements to shares of income and capital of the trust

(1) A * beneficiary of a * CCIV sub ‑ fund trust is taken to have a fixed entitlement to a share of income of the trust that the trust derives from time to time. At a particular time, that share is equal to the percentage worked out using the formula: where: beneficiary dividends is the total of the * dividends that the * beneficiary has a right to receive because of * shares that the beneficiary holds at that time and are * referable to the * sub ‑ fund. total dividends is the total of all * dividends that are payable on all * shares that are on issue at that time and are * referable to the * sub ‑ fund. (2) A * beneficiary of a * CCIV sub ‑ fund trust is taken to have a fixed entitlement to a share of the capital of the trust at a particular time equal to the percentage worked out using the formula: where: beneficiary capital distribution is the amount of a distribution of paid ‑ up capital (in the event of a return of capital) that the * beneficiary has a right to receive because of * shares that the beneficiary holds at that time and are * referable to the * sub ‑ fund. total capital distribution is the total distribution of paid ‑ up capital (in that event) payable on all * shares that are on issue at that time and are * referable to the * sub ‑ fund. (3) A fixed entitlement that exists because of this section is taken to be a fixed entitlement within the meaning given by sections 272 ‑ 5, 272 ‑ 10, 272 ‑ 15 and 272 ‑ 40 in Schedule 2F to the Income Tax Assessment Act 1936 . Note: This is relevant to, for example, the definition of fixed entitlement in subsection 102UC(4) of the Income Tax Assessment Act 1936 .

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-123 — How to work out the income of the trust estate of a CCIV sub ‑ fund trust for an income year

(1) The income (the trust income ) of the trust estate of a * CCIV sub ‑ fund trust for an income year is worked out in accordance with this section. Note: This is relevant to working out the income tax position of the CCIV sub ‑ fund trust and its beneficiaries under Division 6 of Part III of the Income Tax Assessment Act 1936 . (2) If: (a) the * CCIV is a * retail CCIV at the end of the income year; and (b) the amount of the * sub ‑ fund’s profit for the income year, as required to be stated in the financial statements included in the financial report for the sub ‑ fund for the income year that the CCIV is required to prepare because of paragraph 1232C(1)(a) of the Corporations Act 2001 , is greater than nil; the trust income is that profit. (3) If: (a) the * CCIV is not a * retail CCIV at the end of the income year; and (b) the amount of the * sub ‑ fund’s profit for the income year that would, if the CCIV had been a retail CCIV at the end of the income year, be required to be stated as mentioned in paragraph (2)(b) is greater than nil; the trust income is that profit. (4) If neither of subsections (2) and (3) applies, the trust income is nil.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-125 — When a beneficiary of a CCIV sub ‑ fund trust is presently entitled to trust income

(1) A * beneficiary of a * CCIV sub ‑ fund trust is taken to be presently entitled to a share of the income of the trust estate for an income year if any of the * sub ‑ fund’s profit for the income year was or is payable to the beneficiary by way of one or more * dividends declared during, or within 3 months after, the income year. (2) That share consists of so much of that profit as was or is payable to the beneficiary by way of one or more such * dividends. Note: To the extent that any of that profit is not payable to a beneficiary by way of such dividends, it will be income to which no beneficiary is presently entitled. This can have consequences under section 99 or 99A of the Income Tax Assessment Act 1936 . (3) Within 3 months after the end of the income year, the * CCIV must notify the * beneficiary, in the * approved form, of the following matters: (a) whether the beneficiary is presently entitled to a share of the income of the trust estate for the income year and, if so, the amount of that share; (b) for each * dividend that was declared during, or within 3 months after, the income year on * shares referable to the * sub ‑ fund, and was or is payable to the beneficiary: (i) the amount of the dividend; and (ii) how much of the dividend consists of any of the * sub ‑ fund’s profit for the income year. Note: Failure to comply with this section may constitute an offence against subsection 8C(1) of the Taxation Administration Act 1953 . (4) For the purposes of this section, an amount is taken to be payable to the * beneficiary if it is required to be applied or dealt with in any way on the beneficiary’s behalf or as the beneficiary directs. (5) Except as provided in this section, a * beneficiary of a * CCIV sub ‑ fund trust is not taken to be presently entitled to a share of income of the trust estate.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-127 — When a beneficiary of a CCIV sub ‑ fund trust has an individual interest in exempt income and non ‑ assessable non ‑ exempt income of the trust estate

(1) A * beneficiary of a * CCIV sub ‑ fund trust: (a) is taken to have an individual interest in the exempt income of the trust estate from time to time; and (b) is taken to have an individual interest in the * non ‑ assessable non ‑ exempt income of the trust estate from time to time. (2) The individual interest referred to in paragraph (1)(a) or (b) is the same as the share (of income that the trust derives from time to time) to which the beneficiary has a * fixed entitlement under subsection 195 ‑ 120(1). (3) Except as provided in this section, a * beneficiary of a * CCIV sub ‑ fund trust is not taken to have an individual interest in the exempt income, or * non ‑ assessable non ‑ exempt income, of the trust estate.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-130 — Application of Division 275 (managed investment trusts) to a CCIV sub ‑ fund trust

(1) This section sets out how to apply Division 275 to a trust that is a * CCIV sub ‑ fund trust. Determining whether the trust is a managed investment trust (2) Section 275 ‑ 10 has effect in relation to the trust as if the following paragraph were substituted for paragraph 275 ‑ 10(3)(c): (c) at the time the payment is made, the * sub ‑ fund is being used for collective investment by pooling the contributions of the * members of the sub ‑ fund as consideration to acquire rights to benefits produced from those contributions; and (3) In applying section 275 ‑ 10 to the trust, disregard the following provisions: (a) paragraph 275 ‑ 10(3)(d); (b) paragraph 275 ‑ 10(3)(g). (4) Section 275 ‑ 10 has effect in relation to the trust as if the following paragraph were substituted for paragraph 275 ‑ 10(3)(e): (e) the trust satisfies, in relation to the income year: (i) if, at the time the payment is made, the trust is covered by section 275 ‑ 15—either or both of the widely ‑ held requirements in subsection 275 ‑ 20(1) and 275 ‑ 25(1); or (ii) if, at the time the payment is made, the trust is not covered by section 275 ‑ 15—either or both of the widely ‑ held requirements in subsections 275 ‑ 20(2) and 275 ‑ 25(1); and Determining whether the trust is a trust with wholesale membership (5) In applying section 275 ‑ 15 to the trust, disregard paragraph 275 ‑ 15(a). Determining whether the trust satisfies the widely ‑ held requirements (6) In applying section 275 ‑ 45 to the trust, disregard paragraph 275 ‑ 45(1)(d).

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-135 — Application of Division 276 (AMITs) to a CCIV sub ‑ fund trust

(1) This section sets out how to apply Division 276 to a trust that is a * CCIV sub ‑ fund trust. Determining whether the trust is an attribution managed investment trust (AMIT) (2) In applying section 276 ‑ 10 to the trust, disregard the following provisions: (a) paragraph 276 ‑ 10(1)(b); (b) paragraph 276 ‑ 10(1)(e). Note: The effect of disregarding paragraph 276 ‑ 10(1)(e) is that the trustee of a * CCIV sub ‑ fund trust does not have a choice as to whether the trust is an AMIT. Trustee cannot choose to treat classes of membership interests as separate AMITs (3) In applying Division 276 to the trust, disregard section 276 ‑ 20.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 195-140 — Entry on Australian Business Register

(1) If a * CCIV sub ‑ fund trust has an * ABN, the * Australian Business Registrar must enter in the * Australian Business Register in relation to the trust a statement that: (a) indicates that the trust is taken to exist for tax purposes because of the application of section 195 ‑ 110 to a * sub ‑ fund of a * CCIV; and (b) sets out the sub ‑ fund’s ARFN (within the meaning of the Corporations Act 2001 ). Note: ARFN is short for Australian Registered Fund Number. (2) The * Australian Business Registrar must take reasonable steps to ensure that information entered in the * Australian Business Register under this section is accurate. For this purpose, the Registrar may correct or update the information.

Amendment history: Inserted by No 8 of 2022, effective sch 5 (items 1-4, 8-14): 1 July 2022 (s 2(1) item 4) sch 5 (items 15-19): repealed before commencing (s 2(1) item 5) sch 6 (items 1-22, 24), sch 7, sch 8 (items 33, 34), sch 10: 1 Apr 2022 (s 2(1) items 6-8, 10, 14)

s 197-1 — What this Division is about

This Division: (a) applies to certain amounts transferred to a company’s share capital account (see Subdivision 197 ‑ A); and (b) provides for a franking debit to arise if such an amount is transferred to the share capital account (see Subdivision 197 ‑ B); and (c) provides for the tainting of the share capital account if such an amount is transferred, for how the account may be untainted, and for consequences that flow from untainting the account (see Subdivision 197 ‑ C).

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3)

s 197-5 — Division generally applies to an amount transferred to share capital account from another account

(1) Subject to subsection (2), this Division applies to an amount (the transferred amount ) that is transferred to a company’s * share capital account from another of the company’s accounts, if the company was an Australian resident immediately before the time of the transfer. Note: If a company has 2 or more share capital accounts, those accounts are taken to be a single account (see subsection 975 ‑ 300(2)). (2) The other provisions of this Subdivision may stop this Division from applying to some or all of the transferred amount. If those other provisions stop this Division from applying to only some of the transferred amount, this Division (other than this Subdivision) applies to the balance of the transferred amount as if only that balance of the amount had been transferred to the company’s * share capital account.

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3)

s 197-10 — Exclusion for amounts that could be identified as share capital

This Division does not apply to the transferred amount if it could, at all times before the transfer, be identified in the books of the company as an amount of share capital.

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3)

s 197-15 — Exclusion for amounts transferred under debt/equity swaps

(1) Subject to subsection (2), this Division does not apply to the transferred amount if: (a) the transfer is under an * arrangement under which: (i) a person discharges, releases or otherwise extinguishes the whole or a part of a debt that the company owes to the person; and (ii) the discharge, release or extinguishment is in return for the company issuing * shares (other than redeemable preference shares) in the company to the person; and (b) the transfer is a credit to the * share capital account that is made because of the issue of the shares in return for the discharge, release or extinguishment of the debt. (2) If the transferred amount exceeds the lesser of: (a) the * market value of the * shares issued by the company; and (b) so much of the debt as is discharged, released or extinguished in return for the shares; subsection (1) does not stop this Division from applying to the amount of the excess.

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3)

s 197-20 — Exclusion for amounts transferred leading to there being no shares with a par value—non ‑ Corporations Act companies

This Division does not apply to the transferred amount if: (a) immediately before the transfer of the amount, the company was not incorporated under the Corporations Act 2001 ; and (b) the transfer is under, or in accordance with, an * Australian law that requires or allows either or both of the following to become part of the company’s * share capital account: (i) the company’s share premium account; (ii) the company’s capital redemption reserve; and (c) the transfer is made as part of a process that leads to there being no * shares in the company that have a par value; and (d) the amount is transferred from the company’s share premium account or capital redemption reserve.

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3) | Amended by No 143 of 2007, effective Schedule 1 (items 1, 4, 128–194, 222, 223, 225, 226), Schedule 2, Schedule 5 (items 1–16, 48(1)–(3)), Schedule 6 and Schedule 7 (items 18–68): Royal Assent Schedule 5 (items 31–46): 15 Mar 2007 (s 2(1) item 6)

s 197-25 — Exclusion for transfers from option premium reserves

This Division does not apply to the transferred amount if: (a) it is transferred from an option premium reserve of the company; and (b) the transfer is because of the exercise of options to acquire * shares in the company; and (c) premiums in respect of those options were credited to the option premium reserve.

Amendment history: Inserted by No 80 of 2006, effective Schedule 1 (items 2–4), Schedule 2, Schedule 4 (items 1, 5–9, 14, 20, 23–30), Schedule 5, Schedule 6 (items 3–7) and Schedule 11 (items 1, 2, 4–24): Royal Assent Schedule 3 (items 2–5): 30 June 2006 (s 2(1) item 3)