Document ID: chunk:federal_register_of_legislation:C2010C00406:clause:4_3
Version: federal_register_of_legislation:C2010C00406
Segment Type: clause
Provision Reference: sch 4 cl 3
Character Range: 74311–76333

3     (a) the joining entity ceases to be a *subsidiary member of the group at a time (the leaving time) after the joining time; and                                                                                             the amount remaining mentioned in paragraph 104‑520(1)(b)                          working out whether *CGT event L5 happens at the leaving time, and if so, the amount of any *capital gain under subsection 104‑520(3).
      (b) the entity's liabilities at the leaving time are the same as, or are reasonably connected to, the liabilities that it had at the joining time

Limits on application of loss

 (3) The loss can be applied under subsection (2) in relation to an income year only to the extent that it could be *utilised by the *head company for the income year, on the assumption that the *available fraction for the *bundle of losses was 1.

 (4) The amount of the loss that may be applied in accordance with item 1 of the table in subsection (2) cannot exceed the gross forgiven amount (within the meaning of section 245‑75 in Schedule 2C to the Income Tax Assessment Act 1936) of the debt to which the loss is attributable.

 (5) The amount of the loss that may be applied in accordance with item 2 of the table in subsection (2) cannot exceed the amount of the loss that is attributable to the deduction mentioned in that item.

 (6) For the purposes of item 3 of the table in subsection (2), if:
 (a) assuming that the joining entity ceased to be a *subsidiary member of the *consolidated group just after the joining time, the *head company of the group would make a *capital gain because of *CGT event L5; and
 (b) the sum of the losses in the *bundle of losses mentioned in paragraph (1)(c) exceeds the amount of the capital gain;
the total amount of those losses that may be applied in accordance with that item cannot exceed the amount of the capital gain.

 (7) To avoid doubt, a loss can be applied under this section only to the extent that it has not already been applied.