You need to complete a losses schedule and attach it to the trust's tax return if the trust:
- has a total of tax losses and net capital losses carried forward to the 2010-11 income year greater than $100,000
- is a life insurance entity and has either complying superannuation/first home saver account (FHSA) class tax losses or a complying superannuation/first home saver account (FHSA) net capital loss carried forward to the 2010-11 income year
- is a listed widely held trust that is required to satisfy the same business test in Subdivision 269-F of Schedule 2F to the ITAA 1936 (as required by section 266-125 in Schedule 2F) to be able to claim a deduction for a tax loss in the 2009-10 income year or to apply a tax loss in a later income year; or, having passed the 50% stake test, has claimed a deduction for tax losses greater that $100,000
- has convertible foreign losses
- has an interest in a controlled foreign company (CFC) that has convertible CFC losses
- has an interest in a CFC that has deducted or carried forward a loss to later income years greater than $100,000.
If you complete a losses schedule, transfer the totals of the amounts at part A of the losses schedule to the corresponding U and V at item 27 Losses information on the trust tax return. However, if you do not need to complete a losses schedule but the trust has tax losses or net capital losses available to be carried forward to later income years, complete the information required at U and V at item 27 of the trust tax return as appropriate. For more information, see the Losses schedule instructions 2010 (NAT 4088).
If you need to complete a losses schedule under the above criteria, you may also need to complete a CGT schedule.
The foreign tax credit provisions and the foreign loss quarantining provisions have been repealed with effect for a taxpayer's first income year starting on or after 1 July 2008. In particular, foreign tax credits have been replaced with a new income tax offset and the restrictions on claiming foreign losses no longer apply. The amendments apply in relation to the income years commencing on or after 1 July 2008. It will be necessary to consider the transitional provisions to work out how to treat any existing foreign losses and foreign tax credits.
For more information refer to the publication Changes to foreign loss quarantining and foreign tax credit calculation rules - overview.
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