Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p24
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 24/35)
Character Range: 3268857–3271539

the earliest of the realisation events, as the case may be , to have made a *capital loss equal to the amount of the capital loss referred to in subsection (2) or to have become entitled to a deduction equal to the deduction referred to in that subsection, as the case may be.
 (4) If the *capital loss referred to in subsection (2) would have been made from a *personal use asset or from a *collectable, any corresponding capital loss that the originating company is taken by subsection (3) to have made is taken to have been made from a personal use asset or from a collectable, as the case may be.

Division 175—Use of a company's tax losses or deductions to avoid income tax

Table of Subdivisions
 Guide to Division 175
175‑A Tax benefits from unused tax losses
175‑B Tax benefits from unused deductions
175‑CA Tax benefits from unused net capital losses of earlier income years
175‑CB Tax benefits from unused capital losses of the current year
175‑C Tax benefits from unused bad debt deductions
175‑D Common rules

Guide to Division 175

175‑1  What this Division is about

      The Commissioner can reverse the effect of schemes that, in order to avoid tax, bring together in the same company:
           assessable income; and
           tax losses, current year deductions, or deductions for bad debts, that apart from the scheme would not be fully used.

Subdivision 175‑A—Tax benefits from unused tax losses

Table of sections
175‑5 When Commissioner can disallow deduction for tax loss
175‑10 First case: income or capital gain injected into company because of available tax loss
175‑15 Second case: someone else obtains a tax benefit because of tax loss available to company

175‑5  When Commissioner can disallow deduction for tax loss
 (1) This Subdivision sets out cases where the Commissioner may disallow some or all of a *tax loss (or of part of a tax loss) (the excluded loss) as a deduction in calculating a company's taxable income of an income year after the *loss year.
 (2) However, the Commissioner cannot disallow the *excluded loss if the company:
 (a) fails to meet a condition in section 165‑12 (which is about the company maintaining the same owners) in respect of the *loss year or the income year; but
 (b) meets the condition in section 165‑13 in respect of the income year by satisfying the *business continuity test under section 165‑210.

175‑10  First case: income or capital gain injected into company because of available tax loss
 (1) The Commissioner may disallow the *excluded loss if, during the income year, the company *derived assessable income, or a *capital gain accrued to the company, some or all of which (the injected amount)