Commonwealth Consolidated Acts Commonwealth Consolidated Acts
Financial Corporations (Transfer of Assets and Liabilities) Act 1993
1 Subsection 20(1A)
After "provisions in", insert "Part 1 of".
2 At the end of subsection 20(1A)
Add "and the provisions in Part 2 of that Schedule were added at the end of Subdivision 170 - B of that Act".
3 At the end of section 26C
Add:
(2) Subsection ( 1) operates on the basis described in subsection ( 3) if:
(a) the head company of a consolidated group or MEC group incurred a tax loss because of Subdivision 707 - A of the Income Tax Assessment Act 1997 ; and
(b) the company (the real loss - maker ) that incurred the tax loss apart from that Subdivision is a member of the group in the deduction year; and
(c) disregarding section 701 - 1 (the single entity rule) of that Act, this Act applies to one or more transfers by the real loss - maker to the receiving corporation.
Note: In certain cases, Subdivision 707 - A of the Income Tax Assessment Act 1997 treats the head company of a consolidated group or MEC as incurring a tax loss actually incurred by an entity that becomes a member of the group.
(3) Subsection ( 1) operates as if:
(a) the head company were the transferring corporation in relation to each transfer described in paragraph ( 1)(a) and this Act applied to each of those transfers; and
(b) the head company incurred the tax loss for the income year for which the real loss - maker incurred it (apart from Subdivision 707 - A of the Income Tax Assessment Act 1997 ); and
(c) each reference in that subsection to Subdivision 165 - A of that Act were a reference to that Subdivision as its operation is affected by Subdivision 707 - B of that Act, and by Subdivision 719 - F of that Act (if relevant).
Note 1: Subdivision 707 - B of the Income Tax Assessment Act 1997 affects the operation of Subdivision 165 - A of that Act in relation to the deduction of a tax loss incurred by the head company of a consolidated group or MEC group because of Subdivision 707 - A of that Act.
Note 2: Subdivision 719 - F of the Income Tax Assessment Act 1997 affects the operation of Subdivision 165 - A of that Act in relation to the deduction of a tax loss incurred by the head company of a MEC group because of Subdivision 707 - A of that Act.
(4) An expression used in this section and in the Income Tax Assessment Act 1997 has the same meaning in this section as it has in that Act. This subsection does not apply to the expressions deduction year , loss year , this Act and transfer .
4 At the end of section 170 - 5 in Schedule 1
Add:
(5) Special rules extend the scope of this Subdivision to let the head company of a consolidated group or MEC group transfer in some cases a tax loss the company incurred because of Subdivision 707 - A. The rules do this by modifying the basis on which other provisions of this Subdivision operate.
5 At the end of Subdivision 170 - A in Schedule 1
Add:
Special rules for transfer from head company of consolidated group or MEC group
170 - 75 Transfer of a tax loss incurred by the head company because of Subdivision 707 - A
(1) The other sections of this Subdivision operate in relation to the actual or proposed transfer of a * tax loss on the basis described in this section if:
(a) the * head company of a * consolidated group or * MEC group incurred the tax loss because of Subdivision 707 - A; and
(b) the company (the real loss - maker ) that incurred the tax loss apart from Subdivision 707 - A is a * member of the group at the end of the income year for which it is proposed to transfer the loss under this Subdivision.
(2) The other sections of this Subdivision, except section 170 - 28, operate as if:
(a) the * head company were a transferring corporation within the meaning of the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 ; and
(b) the head company had incurred the * tax loss for the income year for which the real loss - maker incurred the tax loss (apart from Subdivision 707 - A).
Note: This has the effect that (because of subsection 170 - 10(1)) those sections operate as if the head company were the loss company and the loss year were the income year for which the real loss - maker incurred the loss.
(3) Section 170 - 28 operates as if:
(a) the real loss - maker were the * loss company; and
(b) section 701 - 1 (the single entity rule) could not affect whether the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 would have applied to the transfer described in section 170 - 28.
6 Schedule 2 (after the heading)
Insert:
Part 1 -- Replacement of sections 170 - 110 to 170 - 145
7 At the end of Schedule 2
Add:
Part 2 -- Addition of provisions at the end of Subdivision 170 - B
Special rules for transfer from head company of consolidated group or MEC group
170 - 175 Transfer of a net capital loss made by the head company because of Subdivision 707 - A
(1) The other sections of this Subdivision operate in relation to the actual or proposed transfer of a * net capital loss on the basis described in this section if:
(a) the * head company of a * consolidated group or * MEC group made the net capital loss because of Subdivision 707 - A; and
(b) the company (the real loss - maker ) that made the net capital loss apart from Subdivision 707 - A is a * member of the group at the end of the income year for which it is proposed to transfer the loss under this Subdivision.
(2) The other sections of this Subdivision, except section 170 - 128, operate as if:
(a) the * head company were a transferring corporation within the meaning of the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 ; and
(b) the head company had made the * net capital loss for the income year for which the real loss - maker made the net capital loss (apart from Subdivision 707 - A).
Note: This has the effect that (because of subsection 170 - 110(1)) those sections operate as if the head company were the loss company and the capital loss year were the income year for which the real loss - maker made the loss.
(3) Section 170 - 128 operates as if:
(a) the real loss - maker were the * loss company; and
(b) section 701 - 1 (the single entity rule) could not affect whether the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 would have applied to the transfer described in section 170 - 28.
(4) Subsection 170 - 135(2) operates as if the reference in it to Subdivision 165 - CA were a reference to that Subdivision as it operates given the effect of Subdivision 707 - B, and Subdivision 719 - F if relevant, on the operation of Subdivision 165 - A.
Note: Subdivision 165 - CA determines whether a net capital loss can be applied by reference to whether Subdivision 165 - A would permit the deduction of a tax loss for the same income year as the net capital loss. Subdivisions 707 - B and 719 - F affect the operation of Subdivision 165 - A in relation to losses made by a company because of Subdivision 707 - A.
8 Application
(1) The amendments of the Financial Corporations (Transfer of Assets and Liabilities) Act 1993 made by this Schedule apply to assessments for the income year including 1 July 2002 and later income years.
(2) In this item:
income year has the same meaning as in the Income Tax Assessment Act 1997 .