Income Tax (Transitional Provisions) 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  

SECTION 707-328   Income year and conditions for possible transfer under Division 170 of the Income Tax Assessment Act 1997  

707-328(1)    
This section sets out the period and conditions referred to:

(a) in subsections 707-325(2) and 707-327(3) ; and

(b) in connection with the requirement that it must have been possible for a company (the notional transferor ) to transfer to another company (the notional transferee ) for an income year a loss under Subdivision 170-A or 170-B of the Income Tax Assessment Act 1997 .

Period to be treated as income year for transfer

707-328(2)    
The period:

(a) starts at the later of these times:

(i) the start of the trial year;

(ii) the start of the income year for which the loss was made; and

(b) ends immediately after the initial transfer time mentioned in subsection 707-320(1) of the Income Tax Assessment Act 1997 .

Note:

For the purposes of identifying the trial year using the definition in section 707-120 of the Income Tax Assessment Act 1997 , the notional transferor mentioned in this section is the same as the joining entity mentioned in that section, and the initial transfer time mentioned in this section is the same as the joining time mentioned in that section.

Conditions

707-328(3)    
The first condition is that neither the notional transferor nor the notional transferee became a subsidiary member of a consolidated group before, at or after the initial transfer time mentioned in the relevant subsection.

707-328(4)    
The second condition is that neither of those Subdivisions had been amended to provide only for transfers involving an Australian branch (as defined in section 160ZZV of the Income Tax Assessment Act 1936 ) of a foreign bank.

707-328(5)    
The third condition is that the notional transferee's income or gains for the income year were great enough not to prevent the transfer.

707-328(6)    
The fourth condition is that those Subdivisions operated as if the notional transferor had made the loss for the income year if the notional transferor had actually made it for an income year ending just before the initial transfer time.