Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 3/11)
Character Range: 3192742–3195384

does not matter whether or not any of the transfers mentioned in subsection (3) would have involved the first link company or the *income company as well as the other company.
 (5) Another circumstance is that the conditions in subsections 170‑30(1) and (2) would have been met for the *loss company and the *income company assuming:
 (a) the *loss year consisted of the part of the income year in which the *tax loss would have been transferred to the income company under Subdivision 707‑A as described in paragraph (2)(c) occurring after the time the transfer would have occurred; and
 (b) so much (if any) of the *deduction year as occurred before the time the transfer would have occurred were disregarded.

170‑35  The loss company
 (1) The *loss company:
 (a) must be an Australian resident and not a *prescribed dual resident; and
 (b) must not be a *dual resident investment company in either the *loss year or the *deduction year.
 (2) If the *loss year and the *deduction year are the same, it must be the case that the *loss company was not required to calculate the *tax loss:
 (a) under section 165‑70 (because of a change in ownership or control); or
 (b) under section 175‑35 (because of injected income or deductions).
 (3) Also, it must be the case that neither Subdivision 165‑A nor Subdivision 175‑A would have prevented the *loss company from deducting the *tax loss in the *deduction year if it had had enough assessable income (including *assessable film income) to offset the tax loss.
Note 1: Subdivision 165‑A deals with the deductibility of a company's tax loss for an earlier income year if there has been a change in the ownership or control of the company in the loss year or the income year. Subdivision 175‑A is about the Commissioner preventing a company from getting certain tax benefits through its unused tax losses.
Note 2: Division 707 affects the operation of Subdivision 165‑A if the loss company incurred the tax loss because of a transfer under Subdivision 707‑A.

170‑40  The income company
 (1) The *income company must be an Australian resident and not a *prescribed dual resident.
 (2) It must not be prevented by Division 165 or 175 from deducting the transferred amount in the *deduction year. Those Divisions do not apply to the *income company if the *loss year and the *deduction year are the same.
Note 1: Division 165 deals with the income tax consequences of changing ownership or control of a company. Division 175 deals with using a company's tax losses to avoid income tax.
Note 2: The condition in subsection (2) may not apply in some cases. See section 170‑42.

170‑42  If the income