Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 195 - Special types of company  

Subdivision 195-A - Pooled development funds (PDFs)  

Working out a PDF's net capital gain and net capital loss

SECTION 195-35   Net capital loss for year in which company becomes a PDF  

195-35(1)    
This section applies if a company becomes a *PDF during an income year and is still a PDF at the end of it.

195-35(2)    
Divide the income year into periods according to subsection 195-15(2) (about working out the company's tax loss for the income year).

195-35(3)    
For each period, work out whether the company has a *net capital gain or a *net capital loss (or both), treating each period as if it were an income year.

195-35(4)    
If the company has:

(a) a *net capital gain for the non-PDF period; and

(b) a *net capital loss for the PDF period;

that loss is a net capital loss of the company for the income year.

Note:

The company can only apply the loss while it is a PDF: see section 195-25 .

195-35(5)    
If the company has a *net capital loss for the non-PDF period:

(a) section 195-25 does not prevent the company from applying its *net capital loss for the income year in working out its *net capital gain for a later income year; and

(b) section 195-30 does not prevent the company from transferring an amount of its net capital loss for the income year under Subdivision 170-B (which is about the transfer of net capital losses within certain wholly-owned groups of companies);

to the extent that its net capital loss for the income year does not exceed its net capital loss for the non-PDF period.

195-35(6)    
These rules apply in addition to the other rules about how *net capital losses are applied or transferred.

The other rules start in Division 102 (about net capital gains and losses).