Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) To the extent that the loss is transferred under section 707‑120 from the joining entity to the * head company of the joined group, this Act operates (except so far as the contrary intention appears) for the purposes of income years ending after the transfer as if:
(a) the head company had made the loss for the income year in which the transfer occurs; and
(b) the joining entity had not made the loss for the income year for which the joining entity actually made the loss.
Head company may utilise loss for income year of transfer
(2) The * head company is not prevented from * utilising the loss for the income year in which the transfer occurs merely because this Act operates as if the head company had made the loss (to the extent of the transfer) for that year.
Debt forgiveness in income year for which loss is made
(3) If a debt of the * head company of the joined group is forgiven (as defined in Subdivision 245‑B in Schedule 2C to the Income Tax Assessment Act 1936 ) in the income year in which the transfer occurs, subsections 245‑105(5) and (6) in that Schedule operate as if the head company had made the loss for an earlier income year.
Note: This subsection has the effect that the loss may be reduced in accordance with one of those subsections by applying the total net forgiven amount for the income year in which the transfer occurs.