Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 4/35)
Character Range: 3221699–3224363

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 capital gain or net capital loss for an income year is usually worked out under section 102‑5 or 102‑10.
Note 3: The condition in subsection (2) may not apply in some cases. See section 170‑142.
 (3) If the capital loss year and the application year are the same, it must be the case that the gain company was not required to calculate its own *net capital gain or *net capital loss for the application year:
 (a) under Subdivision 165‑CB (because of a change in ownership or control); or
 (b) under section 175‑75 (because of an injected capital gain or loss).
Note: In deciding whether paragraph (b) applies, remember that the transferred amount is taken to be a capital loss of the gain company for the application year (because of subsection 170‑120(2)).

170‑142  If the gain company has become the head company of a consolidated group or MEC group
 (1) The condition in subsection (2) of this section applies to the gain company instead of the condition in subsection 170‑140(2) if the conditions in subsections 170‑130(1) and (2) are met in relation to the *loss company and the gain company apart from section 170‑133 and either:
 (a) both these circumstances exist:
 (i) after the start of the capital loss year but before the relevant time described in subsection 170‑130(4), the gain company became the *head company of a *consolidated group or of a *MEC group that came into existence after the start of the capital loss year;
 (ii) the capital loss year and application year are not the same; or
 (b) all these circumstances exist:
 (i) the gain company is, at the relevant time described in subsection 170‑130(4), the head company of a MEC group;
 (ii) before that time but after the end of the capital loss year, the MEC group was involved in an application event described in section 719‑300 (but not covered by subsection 719‑300(4) or (5));
 (iii) the gain company would be taken under section 719‑305 to have transferred losses to itself under Subdivision 707‑A, assuming it had made losses while head company of the group or of a consolidated group involved in the event;
 (iv) the MEC group or consolidated group came into existence before the start of the capital loss year.
Note: An application event involves either expanding an existing MEC group by including extra eligible tier‑1 companies of the top company for the group or creating a MEC group because more companies become eligible tier‑1