Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_3:p13
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 13/20)
Character Range: 126356–128918

(by a previous operation of this Subdivision) because the entity from which the loss was transferred carried on during a particular period the same business as it carried on at a particular time.

 (2) The loss is not transferred from the joining entity to the *head company of the joined group (despite section 707‑120), unless the joining entity satisfies the *same business test for:
 (a) the *trial year (the same business test period); and
 (b) the time (the test time) just before the end of the income year in which the loss was transferred to the joining entity.

Effect of transfer of loss

707‑140  Effect of transfer of loss

 (1) To the extent that the loss is transferred under section 707‑120 from the joining entity to the *head company of the joined group, this Act operates (except so far as the contrary intention appears) for the purposes of income years ending after the transfer as if:
 (a) the head company had made the loss for the income year in which the transfer occurs; and
 (b) the joining entity had not made the loss for the income year for which the joining entity actually made the loss.

Head company may utilise loss for income year of transfer

 (2) The *head company is not prevented from *utilising the loss for the income year in which the transfer occurs merely because this Act operates as if the head company had made the loss (to the extent of the transfer) for that year.

Debt forgiveness in income year for which loss is made

 (3) If a debt of the *head company of the joined group is forgiven (as defined in Subdivision 245‑B in Schedule 2C to the Income Tax Assessment Act 1936) in the income year in which the transfer occurs, subsections 245‑105(5) and (6) in that Schedule operate as if the head company had made the loss for an earlier income year.

Note: This subsection has the effect that the loss may be reduced in accordance with one of those subsections by applying the total net forgiven amount for the income year in which the transfer occurs.

Cancelling the transfer of the loss

707‑145  Cancelling the transfer of the loss

 (1) The *head company of the joined group may choose to cancel the transfer of the loss.

 (2) If the *head company of the joined group does so, this Act (except this section) operates for all income years ending after the transfer as if it had not occurred under section 707‑120.

 (3) The choice cannot be revoked.

What happens if the loss is not transferred?

707‑150  Loss cannot be utilised for income year ending after the joining time

  To the extent that the