INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 80A   LOSSES OF PREVIOUS YEARS NOT TO BE TAKEN INTO ACCOUNT UNLESS THERE IS SUBSTANTIAL CONTINUITY OF BENEFICIAL OWNERSHIP OF SHARES IN COMPANY  

80A(1)   [Beneficial ownership of shares test]  

Notwithstanding sections 79E , 79F , 80 , 80AAA and 80AA but subject to this section and sections 80B , 80DA and 80E , a loss incurred by a company in a year before the year of income shall not be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA unless -

(a) the company satisfies the Commissioner; or

(b) in the case of a company that is not a private company in relation to the year of income, the Commissioner considers that it is reasonable to assume,

that, at all times during the year of income, shares in the company carrying between them -

(c) the right to exercise more than one-half of the voting power in the company;

(d) the right to receive more than one-half of any dividends that may be paid by the company; and

(e) the right to receive more than one-half of any distribution of capital of the company,

were beneficially owned by persons who, at all times during the year in which the loss was incurred, beneficially owned shares in the company carrying between them rights of those kinds.

80A(2)   [Circumstances for tracing interests]  

Where -

(a) subsection (1) would, but for this subsection, apply for the purpose of determining whether a loss incurred by a company in a year before the year of income is to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA ;

(b) during the whole or any part of the year in which the loss was incurred, or during the whole or any part of the year of income, another company or other companies beneficially owned all or any of the shares in the first-mentioned company or an interest or interests in all or any of those shares; and

(c) the first-mentioned company requests the Commissioner at the time when it furnishes to him a return (or, if more than one return is furnished, the first return) of its income of the year of income, or within such further period as the Commissioner allows, that subsection (3) should apply for the purpose referred to in paragraph (a) or the Commissioner considers it reasonable that that subsection should apply for that purpose,

then subsection (3) applies for that purpose in lieu of subsection (1).

80A(3)   [Tracing of interests]  

Where, by virtue of subsection (2), this subsection applies for the purpose of determining whether a loss incurred by a company (in this subsection referred to as the loss company ) in a year before the year of income is to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA , then, notwithstanding those sections but subject to subsection (5) and sections 80B , 80DA and 80E, that loss shall not be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA unless the Commissioner is satisfied, or considers that it is reasonable to assume, that -

(a) at all times during the year of income the voting power in the loss company was, either directly or through one or more interposed companies, trustees or partnerships, controlled, or capable of being controlled, by a person not being a company, or by 2 or more persons not being companies, who, either directly or through one or more interposed companies, trustees or partnerships, controlled, or was or were capable of controlling, the voting power in the loss company at all times during the year in which the loss was incurred;

(b) a person not being a company who had, or 2 or more persons not being companies who had between them, at all times during the year of income a right to receive, directly or indirectly, for his or their own benefit more than one-half of any dividends that might be paid by the loss company would, if the loss company had paid a dividend at any time during the year in which the loss was incurred, have had, or have had between them, as the case may be, a right to receive, directly or indirectly, for his or their own benefit more than one-half of that dividend; and

(c) a person not being a company who had, or 2 or more persons not being companies who had between them, at all times during the year of income a right to receive, directly or indirectly, for his or their own benefit more than one-half of any distribution of capital of the loss company would, if the loss company had made a distribution of capital at any time during the year in which the loss was incurred, have had, or have had between them, as the case may be, a right to receive, directly or indirectly, for his or their own benefit more than one-half of that distribution of capital.

80A(4)   [Deemed right to receive dividend, etc]  

For the purposes of this section, a person shall be deemed to be a person who had, or would have had, a right to receive indirectly for his own benefit the whole or a particular fraction of a dividend that might be, or might have been, paid by a company or of a distribution of capital of a company, or 2 or more persons shall be deemed to be persons who had, or would have had, between them a right to receive indirectly for their own benefit the whole or a particular fraction of such a dividend or distribution of capital, if, in the event of a payment of a dividend by the company, or of a distribution of capital of the company, the person or persons would, otherwise than as a shareholder or shareholders of the company or as a trustee or trustees, receive or have received the whole or that fraction, as the case may be, of that dividend, or of that distribution of capital, if there had been successive distributions of the relative parts of that dividend, or of that distribution of capital, to and by each of any companies or trustees interposed between the company paying the dividend, or making the distribution of capital, and that person or those persons.

80A(5)   [Beneficial ownership through part of loss year]  

Subject to sections 80B , 80DA and 80E , where a loss incurred by a company in a year before the year of income is not, by virtue of subsection (1) or subsection (3), as the case may be, to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA but the company satisfies the Commissioner that that subsection would not have prevented the loss from being so taken into account if regard were had, for the purposes of that subsection, to part only of the year in which the loss was incurred, the Commissioner may take into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA such part of the loss as he considers to be the amount of the loss that was incurred during that part of that year.