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-CA - Applying net capital losses of earlier income years  

Operative provisions

SECTION 165-96   When a company cannot apply a net capital loss  

165-96(1)    

In working out its *net capital gain for the *current year, a company cannot apply a *net capital loss it has for an earlier income year if Subdivision 165-A would prevent it from deducting the loss for the current year if:

(a) the loss were a *tax loss of the company for that earlier income year; and

(b) section 165-20 (about deducting part of a tax loss) were disregarded.

Note 1:

A company ' s net capital gain for an income year is usually worked out under section 102-5 .

Note 2:

Subdivision 165-A deals with the deductibility of a company ' s tax loss for an earlier income year if there has been a change in the ownership or control of the company in the period from the start of the loss year to the end of the income year.

Note 3:

Subdivision 165-F may affect the application of Subdivision 165-A .

165-96(2)    
If subsection (1) prevents the company from applying the *net capital loss, it can apply the part of the loss that it made during a part of that earlier income year, but only if, assuming that part of that income year had been treated as the whole of it, the company would have been entitled to apply the net capital loss.