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INCOME TAX ASSESSMENT ACT 1997 - SECT 175.70 Someone else obtains a tax benefit because of capital loss or gain available to company

INCOME TAX ASSESSMENT ACT 1997 - SECT 175.70

Someone else obtains a tax benefit because of capital loss or gain available to company

  (1)   The Commissioner may * disallow a * capital loss of a company if:

  (a)   a person (other than the company) has obtained or will obtain a tax benefit in connection with a * scheme; and

  (b)   the scheme would not have been entered into or carried out if the company had not made some or all (the available capital loss ) of the capital loss.

However, the capital loss may be disallowed only to the extent of the available capital loss.

  (2)   The Commissioner may * disallow * capital losses of a company (or parts of them) if:

  (a)   a person has obtained or will obtain a tax benefit in connection with a * scheme; and

  (b)   the scheme would not have been entered into or carried out if the company had not made some or all (the available capital gains ) of the * capital gains it made:

  (i)   before it made the capital losses; and

  (ii)   in the same income year as it made them.

The disallowed capital losses and parts of capital losses may exceed the amount of the available capital gains.

Note:   The disallowance may result in a tax loss for the income year: see section   175 - 75.

  (3)   An expression means the same in this section as in Part   IVA of the Income Tax Assessment Act 1936 .

  (4)   The Commissioner cannot * disallow under this section if:

  (a)   the person who has obtained or will obtain the tax benefit had a * shareholding interest in the company at some time during the income year; and

  (b)   the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.

Note:   Section   175 - 100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.

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