Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p38
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 38/45)
Character Range: 6003135–6005781

in working out whether the company can utilise the loss.

Table of sections

Operative provisions
707‑205 Modified period for test for maintaining same ownership
707‑210 Utilisation of certain losses transferred from a company depends on company that made the losses earlier

Operative provisions

707‑205  Modified period for test for maintaining same ownership
 (1) This section modifies Divisions 165, 166 and 167 for the purposes of working out whether a company can *utilise a loss of any *sort that it made because of a transfer under Subdivision 707‑A.
 (2) Subdivision 165‑A and Divisions 166 and 167 operate for those purposes as if the *loss year started at the time of the transfer.
Note 1: This means that the ownership test period defined by subsection 165‑12(1) and the test period defined by subsection 166‑5(2) start at the time of the transfer.
Note 2: Without this section, those periods would start at the start of the income year in which the transfer occurred, so events occurring before the transfer (such as changes in holdings of voting power, rights to dividends or rights to capital) could affect whether the company could utilise the tax loss or net capital loss.

707‑210  Utilisation of certain losses transferred from a company depends on company that made the losses earlier
 (1) This section has effect for the purposes of working out whether a company (the latest transferee) can *utilise for an income year a loss it made because of a *COT transfer from a company (the latest transferor).
 (1A) A transfer of a loss under Subdivision 707‑A from a company to a company is a COT transfer of the loss if the transfer occurs because:
 (a) the transferor meets the conditions in section 165‑12; and
 (b) the conditions in one or more of paragraphs 165‑15(1)(a), (b) and (c) do not exist in relation to the transferor.

Meeting conditions in section 165‑12
 (2) The latest transferee is taken to meet the conditions in section 165‑12 for the income year in relation to the loss if and only if the company (the test company) described in subsection (3) would have met those conditions for the income year had the circumstances described in subsection (4) existed.
Note 1: The latest transferee and the test company may be the same company.
Note 2: Section 707‑405 may affect the income year for which the test company is treated as having made the loss, if the loss is referable to part of an income year.
 (3) The test company is the first company to make the loss. However, if:
 (a) the loss was made by the latest transferor because of one or more earlier transfers of the loss under Subdivision 707‑A from a company