CHAPTER 3
-
SPECIALIST LIABILITY RULES
PART 3-5
-
CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS
Division 165
-
Income tax consequences of changing ownership or control of a company
Subdivision 165-B
-
Working out the taxable income and tax loss for the income year of the change
When a company must work out its taxable income and tax loss under this Subdivision
SECTION 165-35
165-35
On a change of ownership, unless the company satisfies the business continuity test
A company must calculate its taxable income and *tax loss under this Subdivision unless:
(a)
there are persons who had *more than a 50% stake in the company during the whole of the income year; or
Note:
See section
165-220
for a special alternative to the condition in this paragraph.
(b)
there is only
part
of the income year (a part that started at the start of the income year) during which the same persons had *more than a 50% stake in the company, but the company satisfies the *business continuity test for the
rest
of the income year (the
business continuity test period
); or
(c)
the company was a
*
designated infrastructure project entity during the whole of the income year.
Note:
See subsection
415-35(7)
if there is only part of the income year during which the company was a designated infrastructure project entity.
For the purposes of paragraph (b), apply the business continuity test to the *business that the company carried on immediately before the time (the
test time
) when that part ended.
Note 1:
For the business continuity test, see Subdivision
165-E
.
Note 2:
In the case of a widely held or eligible Division
166
company, Subdivision
166-B
modifies how this Subdivision applies, unless the company chooses otherwise.
History
S 165-35 amended by No 7 of 2019, s 3 and Sch 1 items 49
-
51, by substituting
"
*business continuity test for the
rest
of the income year (the
business continuity test period
)
"
for
"
*same business test for the
rest
of the income year (the
same business test period
)
"
in para (b),
"
apply the business continuity test
"
for
"
apply the *same business test
"
and
"
business continuity test
"
for
"
same business test
"
in note 1, effective 1 April 2019 and applicable in relation to income years starting on or after 1 July 2015.
S 165-35 amended by No 124 of 2013, s 3 and Sch 2 items 2 and 3, by substituting
"
period
); or
"
for
"
period
).
"
in para (b) and inserting para (c), applicable in relation to the 2012-13 income year and later income years.
S 165-35 amended by
No 164 of 2007
, s 3 and Sch 6 item 12, by repealing note 3, applicable to:
(a) any tax loss that is incurred in an income year commencing on or after 1 July 2005; and
(b) any net capital loss that is made in an income year commencing on or after 1 July 2005; and
(c) any deduction in respect of a bad debt that is incurred in an income year commencing on or after 1 July 2005.
Note 3 formerly read:
Note 3:
Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the rest of the year: see section
165-212A
.
S 165-35 amended by No 147 of 2005, No 114 of 2000 and No 58 of 2000.
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