Document ID: chunk:federal_register_of_legislation:C2010C00604:clause:7_6:p11
Version: federal_register_of_legislation:C2010C00604
Segment Type: clause
Provision Reference: sch 7 cl 6 (pt 11/14)
Character Range: 158540–161291

time (as reduced by any reductions under section 715‑50 or 715‑55) was greater than nil; and
 (c) the deferred loss company does not satisfy the *same business test for:
 (i) the period (the same business test period) consisting of the deferred loss company's *trial year; and
 (ii) the time (the test time) just before the *changeover time.

Note 1: The 170‑D deferred losses become those of the head company at the formation time because of section 701‑5 (Entry history rule).

Note 2: Paragraph (3)(b) has the effect that if the deferred loss company has other 165‑CC tagged assets affected by section 715‑50 or 715‑55 (because the membership time is when the group comes into existence, and the other 165‑CC tagged assets are membership interests in, or accounting liabilities owed by, another group member), those sections are applied before this section.

 (4) When it is created because of subsection (3), the pool consists of each 170‑D deferred loss covered by subsection (2), and its loss denial balance is equal to the *final RUNL referred to in paragraph (3)(b).

Note: The pool is distinct from any other loss denial pool of the head company, for example, one created under this section because another entity becomes a subsidiary member of the group at the membership time.

715‑365  How loss denial balance is applied when 170‑D deferred loss revives

 (1) If a *170‑D deferred loss on a *CGT asset is in a *loss denial pool of an entity when the loss *revives, the *capital loss or deduction that section 170‑275 would, apart from this section, treat the entity as having made or become entitled to at that time in respect of the asset is reduced by the lesser of:
 (a) the amount of the capital loss or deduction; and
 (b) the pool's *loss denial balance (as reduced by any previous reductions under section 715‑130, subsection 715‑160(1) or this subsection);
and the loss denial balance is reduced by the same amount.

 (2) Subsection (1) applies to *170‑D deferred losses in the order in which they *revive. If 2 or more revive at the same time, it applies to them in whichever order the entity determines.

 (3) Subsection (1) reduces a *loss denial balance before section 715‑130 does, unless the *realisation event happens after the leaving time referred to in that section.

[The next Subdivision is Subdivision 715‑G.]

Subdivision 715‑G—How value shifting rules apply to a consolidated group

Table of sections

715‑410 Extension of single entity rule and entry history rule
715‑450 No reductions or other consequences for interests subject to loss cancellation under Subdivision 715‑H

715‑410  Extension of single entity rule and entry history rule

 (1) Subsection 701‑1(1) (Single entity rule) and section 701‑5 (Entry