Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_6:p4
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 4/6)
Character Range: 591903–594553

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.

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.

Subdivision 175‑C—Tax benefits from unused bad debt deductions

Table of sections

175‑80 When Commissioner can disallow deduction for bad debt
175‑85 First case: income or capital gain injected into company because of available bad debt
175‑90 Second case: someone else obtains a tax benefit because of bad debt deduction available to company

175‑80  When Commissioner can disallow deduction for bad debt

 (1) This Subdivision sets out cases where the Commissioner may disallow some