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INCOME TAX ASSESSMENT ACT 1997 - SECT 170.135 The loss company

INCOME TAX ASSESSMENT ACT 1997 - SECT 170.135

The loss company

  (1)   The loss company:

  (a)   must be an Australian resident (but not a * prescribed dual resident) throughout the capital loss year; and

  (b)   must not be a * dual resident investment company in either the capital loss year or the application year.

  (2)   It must be the case that the loss company was not required to calculate the * net capital loss:

  (a)   under section   165 - 114 (because of a change in ownership or control); or

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

  (3)   Also, it must be the case that neither Subdivision   165 - CA nor Subdivision   175 - CA would have prevented the loss company from applying the * net capital loss in working out its * net capital gain for the application year if it had made enough * capital gains in that 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:   Division   707 affects the operation of Subdivision   165 - CA if the loss company made the net capital loss because of a transfer under Subdivision   707 - A.

Note 3:   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.

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