Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p28
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 28/35)
Character Range: 3278667–3281332

amount.
Note: The disallowance may result in a tax loss for the income year. See section 175‑35.
 (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936.
 (4) The Commissioner cannot disallow under this section if:
 (a) the person who has obtained or will obtain the tax benefit had a *shareholding interest in the company at some time during the income year; and
 (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note: Section 175‑100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.

175‑35  Tax loss resulting from disallowed deductions
 (1) If a company has a taxable income for an income year because the Commissioner disallows under this Subdivision deductions of the company for the income year (or parts of them), the company may also have a *tax loss for the income year.
 (2) The company's tax loss for the income year is calculated as follows.
 (3) Total what the Commissioner has disallowed under this Subdivision.
 (4) If the company has *exempt income for the income year, subtract its *net exempt income.
 (5) Any amount remaining is the company's tax loss for the income year, which is called a loss year.
Note: The meanings of tax loss and loss year are modified by section 36‑55 for a corporate tax entity that has an amount of excess franking offsets.
To find out how much of the tax loss can be deducted in later income years: see Subdivision 165‑A.
To find out how to deduct it: see section 36‑17.

Subdivision 175‑CA—Tax benefits from unused net capital losses of earlier income years

Table of sections
175‑40 When Commissioner can disallow net capital loss of earlier income year
175‑45 First case: capital gain injected into company because of available net capital loss
175‑50 Second case: someone else obtains a tax benefit because of net capital loss available to company

175‑40  When Commissioner can disallow net capital loss of earlier income year
 (1) This Subdivision sets out cases where the Commissioner may prevent a company, in working out its *net capital gain for an income year, from applying some or all of a *net capital loss it has for an earlier income year (or of part of one) (the excluded loss). This is called disallowing the excluded loss.
Note: A company's net capital gain for an income year is usually worked out under section 102‑5.
 (2) However, the Commissioner cannot *disallow the *excluded loss if, in determining (under section 165‑96) whether Subdivision 165‑A would prevent the company from deducting the loss (or the part of the loss) for