Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p5
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 5/11)
Character Range: 3197571–3200391

able to deduct the *tax loss in the *deduction year assuming that it had incurred the tax loss, for the income year in which the loss would have been transferred to it as described in paragraph 170‑33(2)(c), because of one or more transfers under Subdivision 707‑A described in that paragraph.

170‑45  Maximum amount that can be transferred

Loss company can only transfer what it cannot use itself
 (1) The amount transferred cannot exceed what would be the amount of the *loss company's *unutilised *tax loss at the end of the *deduction year if the loss company utilised the tax loss to the greatest extent possible.

Transferred loss must not exceed what the income company can use
 (2) The amount transferred also cannot exceed the amount worked out as follows:

      Method statement
           Step 1. Add together the *income company's assessable income and *net exempt income (if any) for the *deduction year.
           Step 2. Subtract the *income company's deductions for the *deduction year, except deductions for amounts of *tax losses transferred to the income company (by the *loss company or any other company).
           Step 3. Subtract the *income company's deductions for the *deduction year for amounts of *tax losses transferred to the income company (by the *loss company or any other company) by agreements made before the agreement by which the first amount is transferred.
Example: In the deduction year:
• the income company has assessable income of $60,000, net exempt income of $10,000 and deductions of $25,000 (apart from the transferred loss); and
• another company, being a member of the same wholly‑owned group as the income company, transferred a tax loss of $15,000 to the income company; and
• the loss company incurred a tax loss of $50,000.
 Of the $50,000 loss, the loss company can transfer no more than $30,000 ($60,000+$10,000‑$25,000‑$15,000) to the income company.
 (3) Subsection (2) does not apply if the *tax loss is a *film loss. In that case, the amount transferred also cannot exceed the amount worked out as follows:

      Method statement
           Step 1. Add together the *income company's *net assessable film income and *net exempt film income (if any) for the *deduction year.
           Step 2. Subtract the *income company's deductions for the *deduction year for amounts of *film losses transferred to the income company (by the *loss company or any other company) by agreements made before the agreement by which the first amount is transferred.
 (4) Subsections (2) and (3) do not apply if the transfer occurs because either or both of the conditions in subsections 170‑42(2) and (4) are met. In that case, the amount transferred also cannot exceed the amount worked out as follows:

      Method statement
           Step 1. Identify each *bundle of