Document ID: chunk:federal_register_of_legislation:C2010C00690:clause:1_3:p8
Version: federal_register_of_legislation:C2010C00690
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 8/20)
Character Range: 114469–117017

transfer of the loss

707‑145 Cancelling the transfer of the loss

What happens if the loss is not transferred?

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

707‑105  Who can utilise the loss?

 (1) If the loss is transferred, the head company is treated for income years ending after the transfer as having made the loss, so the head company can utilise the loss for those income years to the extent permitted by:
 (a) the general rules (outside this Part) about an entity utilising a loss it has made; and
 (b) the special rules about transferred losses in the other Subdivisions of this Division that supplement and modify those general rules.

Note: If the entity from which the loss was transferred became a subsidiary member of the consolidated group, the entity cannot utilise the loss for those income years because of section 701‑1 (single entity rule) and section 707‑140.

 (2) If the loss is not transferred, then, for an income year ending after the time the entity became a member of the consolidated group, the loss cannot be utilised by any entity.

Note: The loss will not be transferred if the entity would not have been able to utilise it or if the transfer is cancelled under section 707‑145.

[This is the end of the Guide.]

Objects

707‑110  Objects of this Subdivision

 (1) The main objects of this Subdivision are:
 (a) to provide for the transfer of a loss from an entity (the joining entity) becoming a *member of a *consolidated group to the *head company of the group (so the head company may be able to *utilise it), if the joining entity could have utilised the loss if it had not become a member of the group; and
 (b) to prevent the utilisation by any entity of a loss made by the joining entity, if the joining entity could not have utilised the loss if it had not become a member of the group.

Utilising a loss

 (2) An entity utilises a loss:
 (a) in the case of a *tax loss—to the extent it is deducted from an amount of the entity's assessable income or *exempt income; and
 (b) in the case of a *net capital loss—to the extent that it is applied to reduce an amount of the entity's *capital gains; and
 (c) in the case of an overall foreign loss in respect of a class of assessable foreign income (within the meaning of section 160AFD of the Income Tax Assessment Act 1936)—to the extent that the loss is taken into account in reducing the entity's income of that class.

Application

707‑115  What losses this Subdivision applies to

 (1) This Subdivision applies to