Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 170.140

  (1)   The gain company must be an Australian resident throughout the application year.

  (2)   If the capital loss year and the application year are not the same, the gain company must not be prevented by Subdivision   165 - CA or 175 - CA from applying the transferred amount in working out its * net capital gain for the application year.

Note 1:   Subdivision   165 - CA deals with the consequences of changing ownership or control of a company. Subdivision   175 - CA deals with using a company's net capital losses to avoid income tax.

Note 2:   A company's net capital gain or net capital loss for an income year is usually worked out under section   102 - 5 or 102 - 10.

Note 3:   The condition in subsection   (2) may not apply in some cases. See section   170 - 142.

  (3)   If the capital loss year and the application year are the same, it must be the case that the gain company was not required to calculate its own * net capital gain or * net capital loss for the application year:

  (a)   under Subdivision   165 - CB (because of a change in ownership or control); or

  (b)   under section   175 - 75 (because of an injected capital gain or loss).

Note:   In deciding whether paragraph   (b) applies, remember that the transferred amount is taken to be a capital loss of the gain company for the application year (because of subsection   170 - 120(2)).