Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:2_2:p4
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 2 cl 2 (pt 4/7)
Character Range: 258333–260963

section has effect for the purposes of working out under Subdivision 707‑C of the Income Tax Assessment Act 1997 how much of a tax loss, film loss or net capital loss can be utilised if:
 (a) section 707‑325 affects the available fraction for a bundle of other losses by increasing the modified market value of the real loss‑maker of those other losses by an amount worked out by reference to the value donor's modified market value; and
 (b) the loss was transferred under Subdivision 707‑A of that Act at the initial transfer time from the value donor; and
 (c) the loss is not a loss whose utilisation is affected by section 707‑350 (about utilisation of certain losses originally made for an income year ending on or before 21 September 1999); and
 (d) each company covered by subsection (2) would have been able to transfer the loss under Subdivision 707‑A of that Act at the initial transfer time had the company:
 (i) made the loss for the income year for which the value donor made it; and
 (ii) not utilised it; and
 (e) the requirement in subsection (3) is met.

 (2) This subsection covers:
 (a) the real loss‑maker; and
 (b) each other company (if any) by reference to which the available fraction for the bundle was affected under an application of section 707‑325 separate from the application of that section mentioned in paragraph (1)(a) of this section.

 (3) It must have been possible for the value donor to have transferred an amount (greater than a nil amount) of the loss to each company covered by subsection (2) under Subdivision 170‑A or 170‑B of the Income Tax Assessment Act 1997 for an income year consisting of the period described in section 707‑328 had the conditions in that section existed.

Treating value donor's loss as included in bundle

 (4) If the transferee mentioned in subsection 707‑325(1) chooses, sections 707‑310, 707‑335 (except paragraph 707‑335(2)(a)) and 707‑340 of the Income Tax Assessment Act 1997 (and subsections 707‑315(3) and (4) of that Act, so far as they relate to those sections) operate as if, at the initial transfer time:
 (a) the bundle of losses included the loss; and
 (b) the loss was not included in any other bundle of losses.

Note: This section has the effect that the utilisation of the loss will be affected by the available fraction for the bundle of losses.

Choice to treat value donor's loss as included in bundle

 (5) A choice for the purposes of subsection (4):
 (a) may be made only by the day on which the transferee lodges its income tax return for the first income year for which it utilises (except in accordance with section 707‑350) losses