Document ID: chunk:federal_register_of_legislation:C2010C00184:clause:1_4:p3
Version: federal_register_of_legislation:C2010C00184
Segment Type: clause
Provision Reference: sch 1 cl 4 (pt 3/6)
Character Range: 47404–49938

of the foreign loss component of one or more of the tax losses in the parcel that any entity has deducted for an income year is the same after the transfer as immediately before the transfer.

Note 1: This section ensures a tax loss retains its foreign loss component, starting total and deduction history even though the head company is taken after the transfer to have made the loss for the income year in which the transfer occurs.

Note 2: Section 770‑30 sets a limit on how much of an entity's past foreign losses may be deducted in each of the first 4 years after the commencement of this section.

770‑100  Limit where foreign loss component utilised by joining entity

 (1) This section applies where one or more tax losses having a foreign loss component are transferred under Subdivision 707‑A of the 1997 Act to the head company of a consolidated group.

 (2) The limit under subsection 770‑30(1) of the amount of the foreign loss component of the tax losses that the transferee can deduct for an income year (the deduction year) mentioned in an item in the table in that subsection is reduced by the amount (if any) worked out under subsection (3).

 (3) The amount of the reduction is the sum of each amount of the foreign loss component that has been deducted by other entities in respect of a non‑membership period mentioned in section 701‑30 of the 1997 Act, or income year, ending before the end of the deduction year.

Note: Section 701‑30 of the 1997 Act sets out how an entity that is not a subsidiary member of a consolidated group for all of an income year calculates its tax liability or tax loss for the periods (called non‑membership periods) when it is not a member of a group.

770‑105  Modified operation of Subdivision 707‑C of the 1997 Act for foreign loss component

 (1) This section affects the way in which one or more tax losses in a bundle of losses transferred under Subdivision 707‑A of the 1997 Act can be utilised by the transferee in an income year if:
 (a) one or more of the tax losses has a foreign loss component (regardless whether at the time of transfer the bundle included a tax loss having a foreign loss component or an overall foreign loss in respect of a class of income (within the meaning of former section 160AFD of the 1936 Act)); and
 (b) 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.