Income Tax Assessment Act 1997

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  

Working out the company's taxable income

SECTION 165-55   How to attribute deductions to periods  

165-55(1)    
The company ' s deductions for the income year are attributed to periods in the income year as follows.

165-55(2)    
The following deductions are attributed to each period in proportion to the length of the period:

(a) deductions for the decline in value of a *depreciating asset;

See Division 40 .

(b) deductions for *exploration or prospecting, or *mining capital expenditure, in connection with mining or quarrying;

See section 40-80 and Subdivisions 40-H and 40-I .

(ba) (Repealed by No 96 of 2014)

(c) deductions for expenditure, deductions for which are spread over 2 or more income years, but not:

(i) deductions for exploration or prospecting, or capital expenditure, in connection with mining or quarrying; or

See Subdivision 40-I .

(ii) *full year deductions (see subsection (5));

(d) deductions for expenditure of capital monies in connection with an Australian *film.

See former section 124ZAFA of the Income Tax Assessment Act 1936 .

165-55(3)    
All other deductions (except *full year deductions) are attributed to periods as if each period were an income year.

165-55(4)    
*Full year deductions are not attributed to any of the periods. They are brought in at a later stage of the process of calculating the company ' s taxable income for the income year.

165-55(5)    
These are full year deductions :

(a) deductions for bad debts under section 8-1 (about general deductions) or section 25-35 (about bad debts);

(b) deductions for losses on debt/equity swaps under section 63E of the Income Tax Assessment Act 1936 ;

(c) deductions, so far as they are allowable under Division 8 (which is about deductions) because Subdivision H (Period of deductibility of certain advance expenditure) of Division 3 of Part III of the Income Tax Assessment Act 1936 applies to the company in relation to the income year;

(d) (Repealed by No 101 of 2006 )

(e) (Repealed by No 101 of 2006 )

(fa) deductions for payments of pensions, gratuities or retiring allowances under section 25-50 ;

(fb) deductions for gifts under Division 30 ;

(f) deductions for *tax losses of earlier income years.

See Division 36 .

(g) (Repealed by No 169 of 1999)

(h) (Repealed by No 169 of 1999)

(i) (Repealed by No 101 of 2006 )

(j) (Repealed by No 34 of 2014)

165-55(6)    

However, a deduction for the balance of capital expenditure is not a full year deduction if the deduction results from the disposal, loss, lapse, termination of use or destruction of the property.