Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-90 - CONSOLIDATED GROUPS  

Division 719 - MEC groups  

Subdivision 719-F - Losses  

Maintaining the same ownership to be able to utilise loss

SECTION 719-270   Assumptions about the test company having made the loss for an income year  

If test company was top company for focal company ' s MEC group

719-270(1)    
If the test company was the ^* top company for a ^* MEC group and the focal company is or was the ^* head company of that MEC group, assume that the test company made the loss for an income year starting at the relevant time shown in the table.

Start of income year for which test company is assumed to have made loss
	If:	The relevant time is:
1	The focal company made the loss apart from Subdivision 707-A	The start of the income year for which the focal company made the loss
2	The focal company made the loss because it was transferred to the focal company under Subdivision 707-A	The time of the transfer

Note:

Subsection (1) applies even if the test company is still the top company for the MEC group at the end of the claim year.

If test company is focal company or first head company

719-270(2)    
If the test company is:

(a) the focal company; or

(b) the first head company identified in subsection 719-265(6) by reference to the focal company;

assume that the test company made the loss for an income year starting at the relevant time shown in the table.

Start of income year for which test company is assumed to have made loss
	If:	The relevant time is:
1	The test company made the loss apart from Subdivision 707-A (even if the test company later transferred the loss to itself in a *COT transfer)	The start of the income year for which the test company made the loss
2	The test company made the loss because it was transferred to the test company under Subdivision 707-A in a transfer other than a *COT transfer (even if the test company first made the loss apart from that Subdivision)	The time of the transfer

719-270(3)    
If the test company is the first head company, disregard section 719-90 for the purposes of working out the relevant time using the table in subsection (2) of this section.

Note:

This ensures that section 719-90 does not make the items in the table inapplicable by treating the test company as if another company had made the loss instead of the test company.

If subsections (1) and (2) do not apply

719-270(4)    
If neither subsection (1) nor subsection (2) applies, assume that the test company made the loss for an income year starting at the relevant time shown in the table.

Start of income year for which test company is assumed to have made loss
	If:	The relevant time is:
1	The test company made the loss apart from Subdivision 707-A (even if the test company later transferred the loss to itself in a *COT transfer)	The start of the income year for which the test company made the loss
2	The test company made the loss because it was transferred to the test company under Subdivision 707-A in a transfer other than a *COT transfer (even if the test company first made the loss apart from that Subdivision)	The time of the transfer
3	The test company is the test company for the focal company for the loss because the test company was the *top company for a *MEC group whose *head company made the loss before it was transferred to the focal company under Subdivision 707-A	The time that was the relevant time under subsection (1) for the test company as the test company for the first company for which the test company was the test company for the loss

Note:

Subsection (4) applies if the focal company made the loss because of a COT transfer of the loss to the focal company from another company.

719-270(5)    
Disregard section 719-90 for the purposes of items 1 and 2 of the table in subsection (4) of this section if the test company was identified using subsection 719-265(6) .

Note:

This ensures that section 719-90 does not make those items inapplicable by treating the test company as if another company had made the loss instead of the test company.

Other events do not override assumption

719-270(6)    
If the test company transferred the loss to itself or another company under Subdivision 707-A , assume that the transfer did not affect, for income years ending after the transfer:

(a) the fact that the test company made the loss; or

(b) the income year for which the test company is assumed (under subsection (1), (2) or (4)) to have made the loss.