Document ID: chunk:federal_register_of_legislation:C2014C00672:clause:5_2:p2
Version: federal_register_of_legislation:C2014C00672
Segment Type: clause
Provision Reference: sch 5 cl 2 (pt 2/5)
Character Range: 39180–41733

(iii) the Commissioner has made an assessment of the entity's income tax for the year;
 (e) the entity makes a *loss carry back choice for the current year in accordance with Subdivision 160‑C.
Note 1: The entity is entitled to only one loss carry back tax offset for the current year. However, that offset has 2 components, one relating to the earliest year and one relating to the middle year: see section 160‑15.
Note 2: The loss carry back tax offset is a refundable tax offset: see section 67‑23.

160‑15  Amount of loss carry back tax offset
 (1) The amount of the entity's *loss carry back tax offset for the *current year is the least of the following amounts:
 (a) the sum of the *loss carry back tax offset components for the earliest year and the middle year;
 (b) the entity's *franking account balance at the end of the current year;
 (c) $1,000,000 multiplied by the *corporate tax rate for the current year.
 (2) For the purposes of working out the amount of the entity's *loss carry back tax offset for the *current year, the entity's loss carry back tax offset component for an income year is worked out as follows:

      Method statement
           Step 1. Start with the amount of the *tax loss the entity *carries back to the income year (or the sum of the amounts of the tax losses the entity carries back to the income year).
                  Note: If no amount is carried back to the income year, the step 1 amount, and the loss carry back tax offset component for the income year, are nil.
           Step 2. Reduce the step 1 amount by the entity's *net exempt income for the income year.
                  Note: Do not reduce the step 1 amount by the entity's net exempt income to the extent the net exempt income has already been utilised: see section 960‑20.
           Step 3. Multiply the step 2 amount by the *corporate tax rate for the *current year.
           Step 4. The entity's loss carry back tax offset component for the income year is so much of the entity's *income tax liability for the income year as does not exceed the step 3 amount.

Example: Redom Pty Ltd has at the end of the 2013‑14 income year:
(a) a tax loss of $900,000 for that year and a franking account balance of $280,000; and
(b) for the 2011‑12 income year—an income tax liability of $120,000 and net exempt income of $5,000; and
(c) for the 2012‑13 income year—an income tax liability of $210,000.
 Redom chooses to carry back $405,000 of its tax loss for the 2013‑14 year to the 2011‑12 year and $495,000 of that loss to the 2012‑13 year.