Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 713.540

  (1)   This section applies if:

  (a)   a * life insurance company becomes a * member of a * consolidated group at a time (the joining time ); and

  (b)   at the joining time, the life insurance company owns, either directly or indirectly through one or more interposed entities, all the * membership interests in yet another entity (the life insurance subsidiary ) that becomes a * subsidiary member of the group at that time; and

  (c)   all the following membership interests are * segregated exempt assets of the life insurance company:

  (i)   the membership interests (if any) that the life insurance company owns directly in the life insurance subsidiary;

  (ii)   the membership interests (if any) that the life insurance company owns directly in the interposed entities.

  (2)   A * tax loss or * net capital loss of the life insurance subsidiary for an income year ending before the joining time cannot be * utilised by the life insurance subsidiary for an income year ending after that time.

Note:   This prevents the loss from being transferred to the head company of the consolidated group under Subdivision   707 - A (because it means the life insurance subsidiary could not have utilised the loss for the trial year). As a result, section   707 - 150 prevents any other entity from utilising the loss for an income year ending after the joining time.