Taxation Laws Amendment Act (No. 3) 1992 (98 of 1992)

Part 2   AMENDMENT OF THE INCOME TAX ASSESSMENT ACT 1936

Division 4   Amendments relating to pooled development funds Interpretation

9   After section 79E

After section 79E of the Principal Act the following sections are inserted:

Loss of company's first year as a PDF where taxable income consists of pre-PDF income

"79EA.(1) If a company has a taxable income for a year of income because of paragraph (c) of the definition of 'taxable income' in subsection 6(1), this section applies for the purposes of section 79E despite subsections 79E(1) and (2).

"(2) The company incurs a loss in that year of income equal to the loss (if any) that, if:

(a) the period beginning at the start of that year of income and ending immediately before the company became a PDF were a year of income of the company; and

(b) the period ('the PDF notional year') beginning when the company became a PDF and ending at the end of the first-mentioned year of income were a year of income of the company;

the company would be taken because of section 79E to incur in the PDF notional year.

Losses incurred while a PDF not allowable after company ceases to be a PDF

"79EB.(1) If a company is a PDF throughout the last day of a year of income in which it incurs a loss, the loss is not allowable as a deduction from the company's assessable income of a later year of income unless the company is a PDF throughout the later year of income.

"(2) However, if:

(a) a company becomes a PDF during a year of income and is still a PDF at the end of the year of income; and

(b) the company incurs a loss in that year of income otherwise than because of section 79EA;

subsection (1) of this section does not apply to so much of the loss as does not exceed the loss (if any) that, if the period ('the notional year') beginning at the start of the year of income and ending immediately before the company becomes a PDF were a year of income of the company, the company would be taken to incur in the notional year.

"(3) An expression has in this section the same meaning as in section 79E.".