Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 707 - Losses for head companies when entities become members etc.  

Subdivision 707-C - Amount of transferred losses that can be utilised  

How much of a transferred loss can be utilised?

SECTION 707-340   Utilising transferred losses while exempt income remains  

Transferred film losses and net exempt film income

707-340(1)    
If:

(a) the transferee of ^* film losses in a ^* bundle of losses has deducted from its ^* net exempt film income for an income year an amount of those losses that:

(i) is equal to the amount of ^* exempt film income worked out under subsection 707-310(3) for the transferee and the bundle; or

(ii) if section 707-335 affects the transferee's utilisation of losses in the bundle - is reasonable, having regard to that section; and

(b) the transferee still has net exempt film income for the year and film losses remaining in the bundle;

the fact the transferee still has net exempt film income does not stop it deducting film losses remaining in the bundle from its ^* net assessable film income for the year.

Transferred tax losses and net exempt income

707-340(2)    
If:

(a) the transferee of ^* tax losses (other than ^* film losses) in a ^* bundle of losses has deducted from its ^* net exempt income for an income year an amount of its tax losses (other than film losses) in the bundle that:

(i) is equal to the amount of ^* exempt income worked out under subsection 707-310(3) for the transferee and the bundle; or

(ii) if section 707-335 affects the transferee's utilisation of losses in the bundle - is reasonable, having regard to that section; and

(b) the transferee still has net exempt income for the year and tax losses (other than film losses) remaining in the bundle;

the fact the transferee still has net exempt income does not stop it deducting tax losses (other than film losses) remaining in the bundle from its assessable income for the year.

Limit on deduction

707-340(3)    
This section does not allow the deduction for an income year of an amount of losses in a ^* bundle so as to exceed the limit set by section 707-310 or 707-335 on ^* utilisation for the year of losses of that ^* sort in the bundle.