Tax Laws Amendment (Loss Recoupment Rules and Other Measures) Act 2005 (147 of 2005)

Schedule 1   Loss recoupment rules for companies etc.

Income Tax Assessment Act 1997

52   Section 165-117

Repeal the section, substitute:

165-117 What this Subdivision is about

A company cannot deduct a bad debt unless:

(a) if the debt was incurred in an earlier income year - the company had the same owners and the same control throughout the period from the day on which the debt was incurred to the end of the income year in which it writes off the debt as bad; or

(b) if the debt was incurred in the current year - the company had the same owners and the same control during the income year both before and after the debt was incurred;

or, if there has been a change of ownership or control, the company satisfies the same business test by carrying on the same business, entering into no new kinds of transactions and conducting no new kinds of business.

(Companies whose total income for the income year is more than $100 million cannot satisfy the same business test for the second continuity period.)