New Business Tax System (Consolidation and Other Measures) Act 2003 (16 of 2003)

Schedule 20   Consolidation: transfers of losses involving financial corporations

Financial Corporations (Transfer of Assets and Liabilities) Act 1993

3   At the end of section 26C

Add:

(2) Subsection (1) operates on the basis described in subsection (3) if:

(a) the head company of a consolidated group or MEC group incurred a tax loss because of Subdivision 707-A of the Income Tax Assessment Act 1997; and

(b) the company (the real loss-maker ) that incurred the tax loss apart from that Subdivision is a member of the group in the deduction year; and

(c) disregarding section 701-1 (the single entity rule) of that Act, this Act applies to one or more transfers by the real loss-maker to the receiving corporation.

Note: In certain cases, Subdivision 707-A of the Income Tax Assessment Act 1997 treats the head company of a consolidated group or MEC as incurring a tax loss actually incurred by an entity that becomes a member of the group.

(3) Subsection (1) operates as if:

(a) the head company were the transferring corporation in relation to each transfer described in paragraph (1)(a) and this Act applied to each of those transfers; and

(b) the head company incurred the tax loss for the income year for which the real loss-maker incurred it (apart from Subdivision 707-A of the Income Tax Assessment Act 1997); and

(c) each reference in that subsection to Subdivision 165-A of that Act were a reference to that Subdivision as its operation is affected by Subdivision 707-B of that Act, and by Subdivision 719-F of that Act (if relevant).

Note 1: Subdivision 707-B of the Income Tax Assessment Act 1997 affects the operation of Subdivision 165-A of that Act in relation to the deduction of a tax loss incurred by the head company of a consolidated group or MEC group because of Subdivision 707-A of that Act.

Note 2: Subdivision 719-F of the Income Tax Assessment Act 1997 affects the operation of Subdivision 165-A of that Act in relation to the deduction of a tax loss incurred by the head company of a MEC group because of Subdivision 707-A of that Act.

(4) An expression used in this section and in the Income Tax Assessment Act 1997 has the same meaning in this section as it has in that Act. This subsection does not apply to the expressions deduction year , loss year , this Act and transfer .