Document ID: chunk:federal_register_of_legislation:C2004C01244:schedule:1:p2
Version: federal_register_of_legislation:C2004C01244
Segment Type: schedule
Provision Reference: sch 1 (pt 2/5)
Character Range: 99040–101600

of that Act (the income company) if the conditions in this Subdivision are met.

 (2) The amount transferred can be the whole or part of the *tax loss.

Note: A PDF cannot transfer a tax loss, except one for a period before it became a PDF: see section 195-10.

 (3) However, the *loss company cannot transfer so much of the *tax loss as the loss company has deducted, or can deduct, for an income year before the one in which the amount is transferred.

170-15  Income company is taken to have incurred transferred loss

 (1) If an amount of a *tax loss is transferred, the *amount is taken to be a tax loss incurred by the *income company in the *loss year.

 (2) However, if the *loss year is the same as the income year of the *income company for which the amount is transferred (the transfer year), the *income company is taken to have incurred the *tax loss in the income year before the loss year.

Note: This rule is needed because Division 36 allows a tax loss to be deducted only if it was incurred in an earlier income year.

170-20  Who can deduct transferred loss

 (1) If an amount of a *tax loss is transferred, the *income company can deduct the amount in accordance with section 36-15 (which is about how to deduct a tax loss), but only if Subdivision 165-A (as modified by section 170-23) and Subdivision 175-A do not prevent it from doing so.

Note: Subdivision 165-A is about the conditions that a company needs to satisfy before it can deduct a tax loss from an earlier income year.

 Subdivision 175-A is about the Commissioner preventing a company from getting certain tax benefits through its unused tax losses.

 (2) The *loss company can no longer deduct the transferred amount and is taken not to have incurred the *tax loss to the extent of that amount.

170-23  When income company must maintain same owners and control

 (1) Ordinarily, Subdivision 165-A prevents a company from deducting for an income year (the deduction year) a tax loss if there has been a change in the ownership or control of the company between the loss year and the deduction year.

Note: Subdivision 165-A is about the conditions that a company needs to satisfy before it can deduct a tax loss from an earlier income year.

 (2) However, subsection (3) modifies that Subdivision so that the *income company is prevented from deducting for the deduction year a transferred amount of a *tax loss only if there has been a change in ownership or control in the income company between the transfer year and the deduction year.

 (3) That Subdivision applies