Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 3/53)
Character Range: 2921867–2924472

into account at Step 2).
            Note: Do not take into account any notional loss.
 (2) As well as a taxable income, the company will have a tax loss. It is the total of:
• each notional loss; and
• excess full year deductions of particular kinds.
 (3) Special rules apply if the company was in partnership at some time during the income year.
For the special rules that apply if the company was in partnership: see sections 165‑75 to 165‑90.

165‑30  Flow chart showing the application of this Subdivision

Note: If the company was a partner during the income year, special rules apply to calculating a notional loss or notional taxable income.

When a company must work out its taxable income and tax loss under this Subdivision

165‑35  On a change of ownership, unless the company satisfies the business continuity test
  A company must calculate its taxable income and *tax loss under this Subdivision unless:
 (a) there are persons who had *more than a 50% stake in the company during the whole of the income year; or
Note: See section 165‑220 for a special alternative to the condition in this paragraph.
 (b) there is only part of the income year (a part that started at the start of the income year) during which the same persons had *more than a 50% stake in the company, but the company satisfies the *business continuity test for the rest of the income year (the business continuity test period); or
 (c) the company was a *designated infrastructure project entity during the whole of the income year.
Note: See subsection 415‑35(7) if there is only part of the income year during which the company was a designated infrastructure project entity.
For the purposes of paragraph (b), apply the business continuity test to the *business that the company carried on immediately before the time (the test time) when that part ended.
Note 1: For the business continuity test, see Subdivision 165‑E.
Note 2: In the case of a widely held or eligible Division 166 company, Subdivision 166‑B modifies how this Subdivision applies, unless the company chooses otherwise.

165‑37  Who has more than a 50% stake in the company during a period
 (1) If:
 (a) there are persons who had *more than 50% of the voting power in the company during the whole of a period (the ownership test period) consisting of the income year or a part of it; and
 (b) there are persons who had rights to *more than 50% of the company's dividends during the whole of the ownership test period; and
 (c) there are persons who had rights to *more than 50% of the company's capital distributions during the whole of the ownership