Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 170.42

  (1)   The condition in subsection   (2) of this section applies to the * income company instead of the condition in subsection   170 - 40(2) if the conditions in subsections   170 - 30(1) and (2) are met in relation to the * loss company and the income company apart from section   170 - 33 and either:

  (a)   both these circumstances exist:

  (i)   after the start of the * loss year but before the relevant time described in subsection   170 - 30(4), the income company became the * head company of a * consolidated group or of a * MEC group that came into existence after the start of the loss year;

  (ii)   the loss year and * deduction year are not the same; or

  (b)   all these circumstances exist:

  (i)   the income company is, at the relevant time described in subsection   170 - 30(4), the head company of a MEC group;

  (ii)   before that time but after the end of the loss year, the MEC group was involved in an application event described in section   719 - 300 (but not covered by subsection   719 - 300(4) or (5));

  (iii)   the income company would be taken under section   719 - 305 to have transferred losses to itself under Subdivision   707 - A, assuming it had made losses while head company of the group or of a consolidated group involved in the event;

  (iv)   the MEC group or consolidated group came into existence before the start of the * loss year.

Note:   An application event involves either expanding an existing MEC group by including extra eligible tier - 1 companies of the top company for the group or creating a MEC group because more companies become eligible tier - 1 companies of the top company of which the head company of a consolidated group is an eligible tier - 1 company.

  (2)   The * income company must have been able to deduct the * tax loss in the * deduction year assuming that it had incurred the tax loss for the * loss year.

  (3)   The condition in subsection   (4) of this section applies to the * income company instead of the condition in subsection   170 - 40(2) if the conditions in subsections   170 - 30(1) and (2) are met in relation to the * loss company and the income company because of section   170 - 33.

  (4)   The * income company must have been able to deduct the * tax loss in the * deduction year assuming that it had incurred the tax loss, for the income year in which the loss would have been transferred to it as described in paragraph   170 - 33(2)(c), because of one or more transfers under Subdivision   707 - A described in that paragraph.