Document ID: chunk:federal_register_of_legislation:C2025C00029:section:1:p6
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 1 (pt 6/8)
Character Range: 3182708–3185228

assessable income to offset it. The other company must have enough assessable income to offset the transferred tax loss.
 (4) Neither company must be prevented from deducting the loss by Division 165 or 175.
Note: Division 165 deals with the income tax consequences of changing ownership or control of a company. Division 175 deals with using a company's tax losses to avoid income tax.
 (5) The tax loss is transferred by an agreement between the 2 companies.
 (6) The tax loss can be transferred in the same year as it is incurred. In that case different rules apply.

Effect of transferring a tax loss

170‑10  When a company can transfer a tax loss
 (1) A company (the loss company) can transfer an amount of its *tax loss for an income year (the loss year) to another company (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.

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 transfer, 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.
 (3) Despite subsection (1), if the *tax loss is transferred because the conditions in section 170‑32 are met, the *income company is taken to have incurred the tax loss for the income year for which the first prior transferor mentioned in that section incurred the tax loss.
 (4) Despite subsection (1), if the *tax loss is transferred because the condition in subsection 170‑42(4) is met, the *income company is taken to have incurred the tax loss for the income year for which that subsection assumes the income company incurred the tax loss.

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 36‑17 (which is about how to deduct a tax loss), but only for the income year of the income company for which the amount is transferred. That income year is called the deduction year.
 (2) The *loss company can no longer *utilise the transferred amount and is taken not to