Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p26
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 26/35)
Character Range: 3273657–3276470

into or carried out if the excluded loss had not been available to be taken into account for the purposes of:
 • Division 36 (which is about tax losses of earlier years);
 • Division 165 (which is about the income tax consequences of changing ownership or control of a company);
 • former Subdivision 375‑G (which is about film losses).
 (2) However, the Commissioner cannot disallow the *excluded loss if:
 (a) the person had a *shareholding interest in the company at some time during the income year; and
 (b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note: Section 175‑100 allows the Commissioner to disallow an excluded loss of an insolvent company.
 (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936.

Subdivision 175‑B—Tax benefits from unused deductions

Table of sections
175‑20 Income or capital gain injected into company because of available deductions
175‑25 Deduction injected into company because of available income or capital gain
175‑30 Someone else obtains a tax benefit because of a deduction, income or capital gain available to company
175‑35 Tax loss resulting from disallowed deductions

175‑20  Income or capital gain injected into company because of available deductions
 (1) The Commissioner may disallow deductions of a company (or parts of them) for an income year if:
 (a) the company has *derived assessable income, or a *capital gain accrued to the company, some or all of which (the injected amount) would not have been derived, or would not have accrued, if the company did not have those deductions; and
 (b) the income was derived, or the capital gain accrued, in that income year.
The disallowed deductions and parts of deductions may exceed the *injected amount.
Note: The disallowance may result in a tax loss for the income year. See section 175‑35.
 (2) The Commissioner cannot disallow the deductions or parts of the deductions if the *continuing shareholders will benefit from the derivation of the *injected amount to an extent that the Commissioner thinks fair and reasonable having regard to their respective *shareholding interests in the company.
Note: Section 175‑100 allows the Commissioner to disallow the whole or part of any deductions of an insolvent company.
 (3) The continuing shareholders are the individuals who had *shareholding interests in the company both immediately before the *injected amount was *derived, and immediately afterwards.

175‑25  Deduction injected into company because of available income or capital gain
 (1) The Commissioner may disallow a deduction of a company for an income year to the extent that the company would not have incurred the loss, outgoing or expenditure that the deduction is for if it had