Income Tax Assessment Act 1997
View history note
Hide history noteThe Commissioner may *disallow a *capital loss of a company if:
(a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital loss ) of the capital loss.
However, the capital loss may be disallowed only to the extent of the available capital loss.
175-70(2)
The Commissioner may *disallow *capital losses of a company (or parts of them) if:
(a) a person has obtained or will obtain a tax benefit in connection with a *scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital gains ) of the *capital gains it made:
(i) before it made the capital losses; and
(ii) in the same income year as it made them.
The disallowed capital losses and parts of capital losses may exceed the amount of the available capital gains.
Note:
The disallowance may result in a tax loss for the income year: see section 175-75 .
175-70(3)
An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .
175-70(4)
The Commissioner cannot *disallow under this section if:
(a) the person who has obtained or will obtain the tax benefit had a *shareholding interest in the company at some time during the income year; and
(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note:
Section 175-100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.
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