Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_3:p9
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 9/20)
Character Range: 116766–119288

of section 160AFD of the Income Tax Assessment Act 1936)—to the extent that the loss is taken into account in reducing the entity's income of that class.

Application

707‑115  What losses this Subdivision applies to

 (1) This Subdivision applies to a loss of any *sort if:
 (a) an entity (the joining entity) becomes a *member of a *consolidated group (the joined group) at a time (the joining time) in an income year (the joining year); and
 (b) the loss was made by the joining entity for an income year ending before the joining time.

Note 1: If the joining entity had a loss transferred to it by a previous operation of this Subdivision (when the entity was the head company of a consolidated group), this Subdivision operates later as if the joining entity had made the loss. See section 707‑140.

Note 2: Section 707‑405 may affect the income year for which the joining entity is treated as having made the loss, if the joining entity made the loss and the loss is referable to part of an income year.

 (2) This Subdivision applies to the loss only to the extent to which the loss is not utilised or otherwise reduced for:
 (a) an income year ending before the joining time; or
 (b) a non‑membership period mentioned in section 701‑30 that ended before the joining time.

Transfer of loss from joining entity to head company

707‑120  Transfer of loss from joining entity to head company

 (1) At the joining time, the loss is transferred from the joining entity to the *head company of the joined group (even if they are the same entity), to the extent (if any) that the loss could have been *utilised by the joining entity for an income year consisting of the *trial year if:
 (a) at the joining time, the joining entity had not become a *member of the joined group (but had been a *wholly‑owned subsidiary of the head company if the joining entity is not the head company); and
 (b) the amount of the loss that could be utilised for the trial year were not limited by the joining entity's income or gains for the trial year.

What is the trial year?

 (2) The trial year is the period:
 (a) starting at the latest of these times:
 (i) the time 12 months before the joining time;
 (ii) the time the joining entity came into existence;
 (iii) the time the joining entity last ceased to be a *subsidiary member of a *consolidated group, if the joining entity had been a member of a consolidated group before the joining time but was not a *member of a consolidated group just before the joining time; and
 (b)