Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p36
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 36/45)
Character Range: 5998323–6000986

that income year.
 (3) Section 267‑35 in that Schedule has effect as if the reference in that section to an earlier income year were to an income year earlier than the joining year.
 (4) Disregard each distribution (if any) of income or capital (within the meaning of that Schedule) made by the joining entity after the joining time, so far as it was made from an amount of the entity's income or capital attributable to a time after the joining time, in working out:
 (a) whether section 267‑30 in that Schedule requires the joining entity to pass the pattern of distributions test (as defined in that Schedule); and
 (b) whether the joining entity passes that test as required by section 267‑30 or 267‑35 in that Schedule.
Note: Disregarding that percentage of a distribution may affect a test year distribution of income or a test year distribution of capital, as those terms are defined in section 269‑65 in that Schedule, and thus affect whether the joining entity passes the pattern of distributions test under section 269‑60 in that Schedule.

707‑135  Transferring loss transferred to joining entity because business continuity test was satisfied
 (1) This section operates if the loss had been transferred to the joining entity (by a previous operation of this Subdivision) because the entity from which the loss was transferred carried on during a particular period:
 (a) the same business as it carried on at a particular time; or
 (b) if section 165‑211 applies in relation to the loss—a business similar to the business it carried on at a particular time.
Note: Section 165‑211 enables an entity to satisfy the business continuity test by carrying on a similar business.
 (2) The loss is not transferred from the joining entity to the *head company of the joined group (despite section 707‑120), unless the joining entity satisfies the *business continuity test for:
 (a) the *trial year (the business continuity test period); and
 (b) the time (the test time) just before the end of the income year in which the loss was transferred to the joining entity.

Effect of transfer of loss

707‑140  Effect of transfer of loss
 (1) To the extent that the loss is transferred under section 707‑120 from the joining entity to the *head company of the joined group, this Act operates (except so far as the contrary intention appears) for the purposes of income years ending after the transfer as if:
 (a) the head company had made the loss for the income year in which the transfer occurs; and
 (b) the joining entity had not made the loss for the income year for which the joining entity actually made the loss.
 (1A) However, subsection (1) does not affect