Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 165.115BB

Order in which assets are to be applied

  (1)   In applying subsection   165 - 115B(2) or 165 - 115BA(3) in respect of assets that the company owned at the changeover time:

  (a)   the company's * capital losses are taken to have been made, the company is taken to have become entitled to deductions and the company is taken to have made * trading stock losses in the order in which the events that resulted in the capital losses, deductions or trading stock losses occurred; and

  (b)   if 2 or more such events occurred at the same time, they are taken to have occurred in such order as the company determines.

Residual unrealised net loss

  (2)   The company's residual unrealised net loss , at the time of an event (the relevant event ) that resulted in the company making a * capital loss, becoming entitled to a deduction or making a * trading stock loss, in respect of an asset, is the amount worked out using the following formula:

where:

"previous capital losses, deductions or trading stock losses" means the total of the following:

  (a)   capital losses that the company made, deductions to which the company became entitled, or * trading stock losses that the company made, as a result of events earlier than the relevant event in respect of assets that the company owned at the * changeover time;

  (b)   each reduction that section   715 - 105 (as applying to the company as the * head company of a * consolidated group or * MEC group) makes in respect of such an asset because an entity ceased before the time of the relevant event to be a * subsidiary member of the group (but counting only the greater or greatest such reduction if 2 or more are made for the same asset);

or nil if there are none.

"unrealised net loss" means the company's unrealised net loss at the last changeover time that occurred before the relevant event.

Note:   For changeover time see sections   165 - 115C and 165 - 115D.