Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 165.96

When a company cannot apply a net capital loss

  (1)   In working out its * net capital gain for the * current year, a company cannot apply a * net capital loss it has for an earlier income year if Subdivision   165 - A would prevent it from deducting the loss for the current year if:

  (a)   the loss were a * tax loss of the company for that earlier income year; and

  (b)   section   165 - 20 (about deducting part of a tax loss) were disregarded.

Note 1:   A company's net capital gain for an income year is usually worked out under section   102 - 5.

Note 2:   Subdivision   165 - A deals with the deductibility of a company's tax loss for an earlier income year if there has been a change in the ownership or control of the company in the period from the start of the loss year to the end of the income year.

Note 3:   Subdivision   165 - F may affect the application of Subdivision   165 - A.

  (2)   If subsection   (1) prevents the company from applying the * net capital loss, it can apply the part of the loss that it made during a part of that earlier income year, but only if, assuming that part of that income year had been treated as the whole of it, the company would have been entitled to apply the net capital loss.


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