Document ID: chunk:federal_register_of_legislation:C2025C00014:schedule:2f:p17
Version: federal_register_of_legislation:C2025C00014
Segment Type: schedule
Provision Reference: sch 2F (pt 17/79)
Character Range: 2249214–2251949

its net income and tax loss for the income year mentioned in subsection 266‑180(2), that Division is to be applied as if Subdivision 268‑B required the income year to be divided into such periods as would result in the highest possible net income for the income year.

No offences or penalties
 (6) To avoid doubt, subsections (4) and (5) do not cause the trustee of the primary trust to commit any offence or be liable to any penalty under Part 4‑25 in Schedule 1 to the Taxation Administration Act 1953 for deducting the amount concerned, or for not working out the trust's net income and tax loss under Division 268, in the trust's return.

Division 267—Income tax consequences for non‑fixed trusts of change in ownership or control

Subdivision 267‑A—Overview of this Division

267‑5  What this Division is about
      This Division is about the income tax consequences for a non‑fixed trust if its ownership or control changes.

267‑10  Diagram giving overview of this Division

Subdivision 267‑B—Deducting tax losses, and certain amounts in respect of debts, from earlier years

267‑15  What this Subdivision is about

      A non‑fixed trust cannot deduct:
         • a tax loss from a loss year; or
         • certain amounts in respect of debts incurred in earlier income years;
      unless:
         • if applicable, it meets an ownership test based on income and capital distributions; and
         • it did not fail that test in a previous year; and
         • if applicable, it meets an ownership test based on fixed entitlements to income and capital; and
         • its control has stayed the same.
                  Note: The exceptions mentioned in this section apply differently in relation to designated infrastructure project entities: see sections 415‑25 and 415‑30 of the Income Tax Assessment Act 1997.

267‑20  Non‑fixed trust may be denied tax loss deduction

Type of trust to which this Subdivision applies
 (1) This section applies to a trust that:
 (a) can deduct in the income year a tax loss from a loss year; and
 (b) was a non‑fixed trust at any time in the period (the test period) from the beginning of the loss year until the end of the income year; and
 (c) was not an excepted trust at all times in the test period.
To find out the meaning of non‑fixed trust: see section 272‑70.
To find out the meaning of excepted trust: see section 272‑100.

Conditions for deducting tax loss
 (2) The trust cannot deduct the tax loss unless it meets:
• the condition in subsection 267‑30(2) (if applicable); and
• the condition in section 267‑35; and
• the condition in subsection 267‑40(2) (if applicable); and
• the condition in section 267‑45.

267‑25  Non‑fixed trust may be denied debt deduction

Type of