Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p27
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 27/35)
Character Range: 3276251–3278889

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 not *derived some or all of the assessable income it derived in that income year, or had not 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 175‑35.
 (2) The Commissioner cannot disallow any of the deduction if:
 (a) the *continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss, outgoing or expenditure being incurred; 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.
Note: Section 175‑100 allows the Commissioner to disallow a deduction of an insolvent company.
 (3) The continuing shareholders are the individuals who had *shareholding interests in the company both immediately before the loss, outgoing or expenditure was incurred, and immediately afterwards.

175‑30  Someone else obtains a tax benefit because of a deduction, income or capital gain available to company
 (1) The Commissioner may disallow a deduction of a company if:
 (a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a *scheme; and
 (b) the scheme would not have been entered into or carried out if the company had not incurred some or all (the available expense) of the loss, outgoing or expenditure that the deduction is for.
However, the deduction may be disallowed only to the extent of the available expense.
 (2) The Commissioner may disallow deductions of a company (or parts of them) if:
 (a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and
 (b) the scheme would not have been entered into or carried out if some or all (the available amount) of the assessable income that the company *derived or of a *capital gain that accrued to the company:
 (i) before it incurred the losses, outgoings or expenditure that the deductions were for; and
 (ii) in the same income year as it incurred them;
  had not been derived or had not accrued, as the case may be.
The disallowed deductions and parts of deductions may exceed the available amount.
Note: The disallowance may result in a tax loss for the income year. See section 175‑35.
 (3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936.
 (4) The Commissioner