Document ID: chunk:federal_register_of_legislation:C2005A00147:clause:1_79:p2
Version: federal_register_of_legislation:C2005A00147
Segment Type: clause
Provision Reference: sch 1 cl 79 (pt 2/25)
Character Range: 37342–39945

that this Subdivision is not to apply to them

166‑5  How Subdivision 165‑A applies to a widely held or eligible Division 166 company

 (1) This Subdivision modifies the way Subdivision 165‑A applies to a company that is:
 (a) a *widely held company at all times during the income year; or
 (b) an *eligible Division 166 company at all times during the income year; or
 (c) a widely held company for a part of the income year and an eligible Division 166 company for the rest of the income year.

Note 1: Subdivision 165‑A is about the conditions a company must meet before it can deduct a tax loss for an earlier income year.

Note 2: A company can choose that this Subdivision is not to apply to it: see section 166‑15.

Note 3: See section 165‑255 for the rule about incomplete income years.

Meaning of test period

 (2) The company's test period is the period consisting of the *loss year, the income year and any intervening period.

Note: See section 165‑255 for the rule about incomplete test periods.

Substantial continuity of ownership

 (3) The company is taken to have met the conditions in section 165‑12 (which is about the company maintaining the same owners) if there is *substantial continuity of ownership of the company as between the start of the *test period and:
 (a) the end of each income year in that period; and
 (b) the *end of each *corporate change in that period.

Note: See sections 166‑145 and 166‑175 to work out whether there is substantial continuity of ownership and a corporate change.

No substantial continuity of ownership

 (4) The company is taken to have failed to meet the conditions in section 165‑12 if there is no *substantial continuity of ownership of the company as between the start of the *test period and:
 (a) the end of an income year in that period; or
 (b) the *end of a *corporate change in that period.

Satisfies the same business test

 (5) However, if the company satisfies the *same business test for the income year (the same business test period), it is taken to have satisfied the condition in section 165‑13.

Note 1: For the same business test, see Subdivision 165‑E.

Note 2: Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for that year: see section 165‑212A.

Note 3: See section 165‑255 for the rule about incomplete test periods.

 (6) Apply the *same business test to the *business that the company carried on immediately before the earlier of the following times (the test time):
 (a) the end of the first income year;
 (b) the first time in the test period