Document ID: chunk:federal_register_of_legislation:C2004C01244:clause:4_26c
Version: federal_register_of_legislation:C2004C01244
Segment Type: clause
Provision Reference: sch 4 cl 26C
Character Range: 94772–96354

26C  Deduction for tax loss—easing of restrictions on transferring corporation

  If:
 (a) this Act applies to one or more transfers by the transferring corporation to the receiving corporation; and
 (b) the transferring corporation is taken (otherwise than because of a transfer of a tax loss under section 80G of the Income Tax Assessment Act 1936 or Subdivision 170-A of the Income Tax Assessment Act 1997) to have incurred a tax loss for a year of income (the loss year); and
 (c) the loss year is the income year in which section 26 of this Act commenced or an earlier income year; and
 (d) Subdivision 165-A or 175-A, or both, of the Income Tax Assessment Act 1997 prevent the transferring corporation from deducting an amount of that tax loss for an income year (the deduction year); and
 (e) the transferring corporation did not, at any time in the deduction year, derive income from:
 (i) a business of a kind that it did not carry on; or
 (ii) a transaction of a kind that it had not entered into in the course of its business operations;
  before the transfer, or the earliest of the transfers, occurred;
neither Subdivision 165-A nor 175-A of that Act  prevents the transferring corporation from deducting that amount.

Note: Subdivision 165-A of the Income Tax Assessment Act 1997 is about the conditions that a company needs to satisfy before it can deduct a tax loss from an earlier income year.

 Subdivision 175-A of the Income Tax Assessment Act 1997 is about the Commissioner preventing a company from getting certain tax benefits through its unused tax losses.