Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p3
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 3/35)
Character Range: 3219266–3221943

would have been transferred under Subdivision 707‑A from the other company as described in that paragraph.
 (4) It does not matter whether or not any of the transfers mentioned in subsection (3) would have involved the first link company or the gain company as well as the other company.
 (5) Another circumstance is that the conditions in subsection 170‑130(1) and (2) would have been met for the *loss company and the gain company assuming:
 (a) the capital loss year consisted of the part of the income year in which the *net capital loss would have been transferred to the gain company under Subdivision 707‑A as described in paragraph (2)(c) occurring after the time the transfer would have occurred; and
 (b) so much (if any) of the application year as occurred before the time the transfer would have occurred were disregarded.

170‑135  The loss company
 (1) The loss company:
 (a) must be an Australian resident (but not a *prescribed dual resident) throughout the capital loss year; and
 (b) must not be a *dual resident investment company in either the capital loss year or the application year.
 (2) It must be the case that the loss company was not required to calculate the *net capital loss:
 (a) under section 165‑114 (because of a change in ownership or control); or
 (b) under section 175‑75 (because of an injected capital gain or loss).
 (3) Also, it must be the case that neither Subdivision 165‑CA nor Subdivision 175‑CA would have prevented the loss company from applying the *net capital loss in working out its *net capital gain for the application year if it had made enough *capital gains in that year.
Note 1: Subdivision 165‑CA deals with the consequences of changing ownership or control of a company. Subdivision 175‑CA deals with using a company's net capital losses to avoid income tax.
Note 2: Division 707 affects the operation of Subdivision 165‑CA if the loss company made the net capital loss because of a transfer under Subdivision 707‑A.
Note 3: A company's net capital gain or net capital loss for an income year is usually worked out under section 102‑5 or 102‑10.

170‑140  The gain company
 (1) The gain company must be an Australian resident throughout the application year.
 (2) If the capital loss year and the application year are not the same, the gain company must not be prevented by Subdivision 165‑CA or 175‑CA from applying the transferred amount in working out its *net capital gain for the application year.
Note 1: Subdivision 165‑CA deals with the consequences of changing ownership or control of a company. Subdivision 175‑CA deals with using a company's net capital losses to avoid income tax.
Note 2: A company's net