INCOME TAX ASSESSMENT ACT 1936 (ARCHIVE)

PART III - LIABILITY TO TAXATION  

Division 3 - Deductions  

Subdivision A - General  

SECTION 80DA   LOSSES OF PREVIOUS YEARS NOT TO BE TAKEN INTO ACCOUNT IN CERTAIN CIRCUMSTANCES  

80DA(1)   [Compliance with beneficial ownership of shares test insufficient]  

Notwithstanding sections 79E , 79F , 80 , 80AAA and 80AA but subject to section 80E , a loss, or a part of a loss, incurred by a company in a year (in this section referred to as the year of loss ), before the year of income shall not be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA if -

(a) during the year of income the company derived income that the company would not have derived, or a capital gain accrued to the company that would not have accrued to the company, if the loss, or the part of the loss, had not been available to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA ;

(b) a person other than the company will, either directly or indirectly, receive any benefit or obtain any advantage in relation to the application of this Act as a result of the operation of any agreement, scheme, arrangement, understanding, transaction, course of conduct or course of business that would not have been entered into or carried out if the loss, or the part of the loss, had not been available to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA ;

(c) the affairs or business operations of the company were managed or conducted during the year of income without proper regard to the rights, powers or interests of continuing shareholders in the company; or

(d) during the whole or any part of the year of income the voting power in the company was, either directly or through one or more interposed companies, trustees or partnerships, controlled by a person who did not, either directly or through one or more interposed companies, trustees or partnerships, control the voting power in the company during the whole of the year of loss or, in a case to which subsection 80A(5) applies, during the part of the year of loss referred to in that subsection, and that person acquired the control of that voting power for the purpose, or for purposes that included the purpose, of receiving any benefit or obtaining any advantage in relation to the application of this Act or securing that another person would receive such a benefit or obtain such an advantage.

80DA(2)   [Application of s 80DA(1)(a)]  

Paragraph (1)(a) applies notwithstanding that the income was derived by the company, or the capital gain accrued to the company in the course of ordinary family or commercial dealing but that paragraph does not apply where the continuing shareholders will benefit from the derivation of the income, or the accrual of the capital gain, to an extent that the Commissioner considers to be fair and reasonable having regard to their rights and interests in the company.

80DA(3)   [Deemed receipt of benefit, etc, for s 80DA(1)(b) purposes]  

Without limiting the generality of paragraph (1)(b), a person shall be deemed, for the purposes of that paragraph, to receive a benefit or obtain an advantage in relation to the application of this Act if the person is not liable to pay income tax in respect of a year of income, or the liability of the person to pay income tax in respect of a year of income is reduced, by reason that the person has not derived income that the person would have derived, or a capital gain did not accrue to the person that would have accrued, if the agreement, scheme, arrangement, understanding, transaction, course of conduct or course of business had not been entered into or carried out.

80DA(4)   [Application of s 80DA(1)(b)]  

Paragraph (1)(b) applies notwithstanding that the agreement, scheme, arrangement, understanding, transaction, course of conduct or course of business was entered into or carried out in the course of ordinary family or commercial dealing but that paragraph does not apply in relation to a benefit or advantage that is received or obtained by a person who had a shareholding interest in the company in the year of income, being a benefit or advantage that the Commissioner considers to be fair and reasonable having regard to that shareholding interest.

80DA(5)   [Shareholding interest defined]  

For the purposes of this section -

(a) a person has a shareholding interest in a company if he is the beneficial owner of, or of an interest in, any shares in the company; and

(b) where a person has a shareholding interest in a company that has a shareholding interest in another company (including a shareholding interest that the company has in that other company by any other application or applications of this paragraph) that person shall be deemed to have a shareholding interest in that other company.

80DA(6)   [Continuing shareholders defined]  

For the purposes of the application of this section in relation to a loss, or a part of a loss, incurred by a company, a reference in this section to continuing shareholders in the company shall -

(a) if subsection 80A(1) applies for the purpose of determining whether the loss, or the part of the loss, is to be taken into account for the purposes of section 79E , 79F , 80 , 80AAA or 80AA - be read as a reference to persons referred to in subsection 80A(1) ; and

(b) if subsection 80A(3) applies for the purpose of determining whether the loss, or the part of the loss, is to be so taken into account - be read as a reference to persons referred to in subsection 80A(3) .

80DA(7)   [Management, etc, of company's affairs for s 80DA(1)(c) purposes]  

In determining for the purposes of this section whether the affairs or business operations of a company were managed or conducted as mentioned in paragraph (1)(c), regard shall be had to any act or thing done in the course of the management or conduct of those affairs or business operations, irrespective of the purpose or purposes for which that act or thing was done and notwithstanding that the doing of that act or thing took place in the course of ordinary family or commercial dealing.

80DA(8)   [Interpretation]  

For the purposes of this section, it shall be taken that:

(a) income would not have been derived by, or a capital gain would not have accrued to, a company if a particular act had not been done;

(b) income would have been derived by, or a capital gain would have accrued to, a person if a particular act had not been done; or

(c) an agreement, scheme, arrangement, understanding, transaction, course of conduct or course of business would not have been entered into or carried out if a particular act had not been done,

if the income would not have been derived by, or the capital gain would not have accrued to, the company, the income would have been derived by, or the capital gain would have accrued to, the person, or the agreement, scheme, arrangement, understanding, transaction, course of conduct or course of business would not have been entered into or carried out, as the case may be, if none of 2 or more acts (including that act) had been done.

80DA(9)   [The ``doing of an act'']  

A reference in subsection (8) to the doing of an act includes a reference to the happening of an event or the existence of a matter or circumstance.