Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 170.142

  (1)   The condition in subsection   (2) of this section applies to the gain company instead of the condition in subsection   170 - 140(2) if the conditions in subsections   170 - 130(1) and (2) are met in relation to the * loss company and the gain company apart from section   170 - 133 and either:

  (a)   both these circumstances exist:

  (i)   after the start of the capital loss year but before the relevant time described in subsection   170 - 130(4), the gain company became the * head company of a * consolidated group or of a * MEC group that came into existence after the start of the capital loss year;

  (ii)   the capital loss year and application year are not the same; or

  (b)   all these circumstances exist:

  (i)   the gain company is, at the relevant time described in subsection   170 - 130(4), the head company of a MEC group;

  (ii)   before that time but after the end of the capital loss year, the MEC group was involved in an application event described in section   719 - 300 (but not covered by subsection   719 - 300(4) or (5));

  (iii)   the gain company would be taken under section   719 - 305 to have transferred losses to itself under Subdivision   707 - A, assuming it had made losses while head company of the group or of a consolidated group involved in the event;

  (iv)   the MEC group or consolidated group came into existence before the start of the capital loss year.

Note:   An application event involves either expanding an existing MEC group by including extra eligible tier - 1 companies of the top company for the group or creating a MEC group because more companies become eligible tier - 1 companies of the top company of which the head company of a consolidated group is an eligible tier - 1 company.

  (2)   The gain company must have been able to apply the * net capital loss in working out its * net capital gain for the application year assuming that it had made the net capital loss for the capital loss year.

  (3)   The condition in subsection   (4) of this section applies to the gain company instead of the condition in subsection   170 - 140(2) if the conditions in subsections   170 - 130(1) and (2) are met in relation to the * loss company and the gain company because of section   170 - 133.

  (4)   The gain company must have been able to apply the * net capital loss in working out its * net capital gain for the application year assuming that it had made the net capital loss, for the income year in which the loss would have been transferred to it as described in paragraph   170 - 133(2)(c), because of one or more transfers under Subdivision   707 - A described in that paragraph.