INCOME TAX ASSESSMENT ACT 1997 - SECT 719.265 What is the test company?
INCOME TAX ASSESSMENT ACT 1997 - SECT 719.265
What is the test company?(1) To identify for the purposes of section 719 - 260 the company that is the test company for the focal company for the loss:
(a) first, identify the test company for the focal company by applying whichever one of subsections (2), (3), (3A), (4) and (6) is relevant; and
(b) then, if the condition in column 1 of an item of the table is met, apply this section again to identify the test company as if the company described in column 2 of the item were the focal company, taking account only of things that happened before the event described in column 3 of the item.
Repeated application of this section | |||
| Column 1 | Column 2 | Column 3 |
1 | Under subsection (2) as the company that is the test company for the transferor | The transferor mentioned in subsection (2) | The transfer mentioned in subsection (2) |
2 | Under subsection (6) as the company that is the test company for the first head company | The first head company mentioned in subsection (6) | The first head company ceasing to be the * head company of the * MEC group mentioned in subsection (6) |
Note: More than 2 applications of this section may be needed to identify the test company for the focal company.
COT transfer of loss to focal company
(2) The test company for the focal company is the company described in column 2 of the relevant item of the table if the focal company made the loss because of a * COT transfer to the focal company.
Test company for the focal company | ||
| Column 1 | Column 2 |
1 | The focal company and the transferor are the same company | The focal company |
2 | The focal company and the transferor are different companies | The company that is the test company for the transferor |
Loss transferred because business continuity test satisfied
(3) The test company for the focal company is the company described in column 2 of the relevant item of the table if the focal company made the loss because the loss was transferred under Subdivision 707 - A to the focal company from a company because it satisfied the * business continuity test for:
(a) the * business continuity test period; and
(b) the * test time specified in Division 165 or 166 or section 707 - 125.
Test company for the focal company | ||
| Column 1 | Column 2 |
1 | The focal company was the * head company of a * MEC group at the time of the transfer | The company that was the * top company for the MEC group at the time of the transfer |
2 | The focal company was not the * head company of a * MEC group at the time of the transfer | The focal company |
Transfer of tax loss from designated infrastructure project entity
(a) the focal company made the loss because the loss was transferred under Subdivision 707 - A to the focal company as the * head company of a * MEC group; and
(b) subsection 707 - 120(5) (about designated infrastructure project entities joining consolidated groups) applies to the transfer;
the test company for the focal company is the company that was the * top company for the MEC group at the time of a transfer.
Loss not transferred from a company
(4) The test company for the focal company is the company described in column 2 of the relevant item of the table if the focal company made the loss apart from a transfer of the loss under Subdivision 707 - A from a company.
Test company for the focal company | ||
| Column 1 | Column 2 |
1 | The focal company made the loss apart from Subdivision 707 - A and was the * head company of a * MEC group at the start of the income year for which it made the loss | The company that was the * top company for the MEC group at the start of the income year |
2 | The focal company made the loss because it was transferred under Subdivision 707 - A to the focal company as the * head company of a * MEC group from an entity other than a company | The company that was the * top company for the MEC group at the time of the transfer |
3 | Neither item 1 nor item 2 applies | The focal company |
Relationship between subsections (2), (3) and (4)
(5) Subsection (2) or (3), and not subsection (4), is relevant for identifying the test company for the focal company if the focal company made the loss apart from a transfer under Subdivision 707 - A, and later transferred the loss to itself under that Subdivision.
Change of head company
(6) If, under section 719 - 90, the focal company is taken to have made the loss because:
(a) a company (the first head company ) other than the focal company made the loss apart from that section and either:
(i) was the * head company of a * MEC group at any time during the income year for which it made the loss; or
(ii) became the head company of a MEC group after that income year (without having been a * subsidiary member of the group before becoming the head company); and
(b) the focal company was later the head company of the MEC group;
the test company for the focal company is the company that is the test company for the first head company.
Note: Section 719 - 90 applies if there is a change in the head company of a MEC group, treating the later head company as if what had happened to the earlier head company had happened to the later head company.
(7) Subsections (2), (3), (3A) and (4) and section
719 - 90 have effect subject to subsection (6) of this section.