Document ID: chunk:federal_register_of_legislation:C2010C00184:clause:1_4:p4
Version: federal_register_of_legislation:C2010C00184
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 4/6)
Character Range: 49703–52377

section 770‑30 limits the amount of the foreign loss component that the transferee can deduct in the income year.

 (2) Subdivision 707‑C of the 1997 Act does not limit the utilisation of the foreign loss component for the income year.

Note: This means that the available fraction does not apply to the foreign loss component of a tax loss in the first 4 years after commencement. Instead, the deduction limit in section 770‑30 applies.

 (3) For the purposes of working out under Subdivision 707‑C of the 1997 Act how much of the tax losses in the bundle the transferee can utilise in the income year, section 707‑310 of the 1997 Act has effect as if the first reference in paragraph (3)(b) of that section to the transferee's losses included a reference to the sum of the amounts of the foreign loss components for all loss parcels in the income year.

Note: This affects the limit that Subdivision 707‑C of that Act sets on utilising other tax losses in the bundle (because that limit depends on the transferee's income and gains remaining after utilisation of losses that have not been transferred under Subdivision 707‑A of that Act): see subsection 707‑310(3) of that Act.

770‑110  Application of Subdivision to MEC groups

  This Subdivision has effect in relation to a MEC group in the same way in which it has effect in relation to a consolidated group.

Subdivision 770‑C—Transitional foreign losses (special rules for CFCs)

Table of sections

770‑160 Converting a past CFC loss
770‑165 Convertible CFC loss
770‑170 Reducing the amount of a CFC loss of a class of notional assessable income

770‑160  Converting a past CFC loss

 (1) The Income Tax Assessment Act 1936 (the 1936 Act) operates for the purposes of the statutory accounting periods mentioned in subsection (2) as if an eligible CFC (within the meaning of Division 7 of Part X of that Act) (an eligible CFC) that has a convertible CFC loss for an earlier statutory accounting period under section 770‑165 has a loss for the earlier period equal to the amount of the convertible CFC loss.

Note: Part X of the 1936 Act deals with the attribution of the income of a CFC to attributable taxpayers.

 (2) The statutory accounting periods are:
 (a) the first statutory accounting period starting on or after the first 1 July that occurs after the day on which the Tax Laws Amendment (2007 Measures No. 4) Act 2007 receives the Royal Assent (the commencement period); and
 (b) later statutory accounting periods.

770‑165  Convertible CFC loss

 (1) An eligible CFC has a loss to which this section applies (a convertible CFC loss) for an earlier statutory accounting period covered by subsection (2)