Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_6:p3
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 6 (pt 3/6)
Character Range: 589366–592128

resulting from disallowed capital losses

175‑55  When Commissioner can disallow capital loss of current year

  This Subdivision sets out cases where the Commissioner may prevent a company, in working out its *net capital gain or *net capital loss for an income year, from applying all or part of a *capital loss it made during the income year. This is called disallowing the capital loss or part.

175‑60  Capital gain injected into company because of available capital loss

 (1) The Commissioner may *disallow *capital losses of a company (or parts of them) for an income year if:

 (a) the company has made a *capital gain some or all of which (the injected capital gain) it would not have made if it did not have those capital losses; and

 (b) the injected capital gain was made in that income year.

The disallowed capital losses and parts of capital losses may exceed the amount of the injected capital gain.

Note: The disallowance may result in a net capital loss for the income year: see section 175‑75.

 (2) The Commissioner cannot disallow the capital losses or parts of the capital losses if the *continuing shareholders will benefit from the making of the injected capital gain to an extent that the Commissioner thinks fair and reasonable having regard to their respective *shareholding interests in the company.

 (3) The continuing shareholders are the individuals who had *shareholding interests in the company both immediately before the *injected capital gain was made, and immediately afterwards.

175‑65  Capital loss injected into company because of available capital gain

  (1) The Commissioner may *disallow a *capital loss of a company for an income year to the extent that the company would not have made the loss if it had not also made some or all of a *capital gain it made in that income year.

Note: The disallowance may result in a tax loss for the income year: see section 175‑75.

 (2) The Commissioner cannot disallow any of the *capital loss if:

 (a) the *continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss being made; and

 (b) the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective *shareholding interests in the company.

 (3) The continuing shareholders are the individuals who had *shareholding interests in the company both immediately before the *capital loss was made, and immediately afterwards.

175‑70  Someone else obtains a tax benefit because of capital loss or gain available to company

 (1) The Commissioner may *disallow a *capital loss of a company if:

 (a) a person (other than the company) has obtained or will obtain a tax