Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p2
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 2/53)
Character Range: 2919321–2922076

the change

Guide to Subdivision 165‑B

165‑23  What this Subdivision is about

      A company that has not had the same ownership and control during the income year, and has not satisfied the business continuity test, works out its taxable income and tax loss under this Subdivision.

Table of sections
165‑25 Summary of this Subdivision
165‑30 Flow chart showing the application of this Subdivision

When a company must work out its taxable income and tax loss under this Subdivision
165‑35 On a change of ownership, unless the company satisfies the business continuity test
165‑37 Who has more than a 50% stake in the company during a period
165‑40 On a change of control of the voting power in the company, unless the company satisfies the business continuity test

Working out the company's taxable income
165‑45 First, divide the income year into periods
165‑50 Next, calculate the notional loss or notional taxable income for each period
165‑55 How to attribute deductions to periods
165‑60 How to attribute assessable income to periods
165‑65 How to calculate the company's taxable income for the income year

Working out the company's tax loss
165‑70 How to calculate the company's tax loss for the income year

Special rules that apply if the company is in partnership
165‑75 How to calculate the company's notional loss or notional taxable income for a period when the company was a partner
165‑80 How to calculate the company's share of a partnership's notional loss or notional net income for a period if both entities have the same income year
165‑85 How to calculate the company's share of a partnership's notional loss or notional net income for a period if the entities have different income years
165‑90 Company's full year deductions include a share of partnership's full year deductions

165‑25  Summary of this Subdivision
 (1) The company calculates its taxable income for the income year in this way:

      Method statement
           Step 1. Divide the income year into periods: each change in ownership or control is a dividing point between periods.
           Step 2. Treat each period as if it were an income year and work out the notional loss or notional taxable income for that period.
           Step 3. Work out the taxable income for the year of the change by adding up:

                 each notional taxable income; and
                 any full year amounts (amounts of assessable income not taken into account at Step 2);

            and then subtracting any full year deductions (deductions not taken into account at Step 2).
            Note: Do not take into account any notional loss.
 (2) As well as a taxable income, the company will have a tax loss. It is the total of:
• each notional loss; and
• excess