1.

You go bankrupt, or you are released from debts under a bankruptcy law: your right to deduct tax losses of an earlier income year may be affected.

Subdivision   36 - B

1.

A company has had a change of ownership or control during the income year, and has not satisfied the business continuity test: it works out its taxable income and its tax loss in a special way.

Subdivision   165 - B

2.

A company wants to deduct a tax loss. It cannot do so unless:

•   the same people owned the company during the loss year, the income year and any intervening year; and

Subdivision   165 - A

•   no person controlled the company's voting power at any time during the income year who did not also control it during the whole of the loss year and any intervening year;

or the company has satisfied the business continuity test.

3.

One or more of these things happen:

•   income is injected into a company;

•   a tax benefit is obtained from available losses or deductions;

•   a deduction is injected into a company;

•   a tax benefit is obtained because of available income.

The Commissioner can disallow tax losses or current year deductions.

Division   175

4.

A company can transfer a surplus amount of its tax loss to another company so that the other company can deduct the amount in the income year of the transfer. (Both companies must be members of the same wholly - owned group.)

Subdivision   170 - A

See also: Tax losses of pooled development funds (PDFs) below

5.

A life insurance company

Subdivision   320 - D

6.

A company is a designated infrastructure project entity.

Subdivision   415 - B

1.

A corporate tax entity that has an amount of excess franking offsets for an income year: it works out its tax loss in a special way.

Subdivision   36 - C

See also Division   160 (loss carry back tax offset for 2020 - 21, 2021 - 22 or 2022 - 23 for businesses with turnover under $5 billion)

3.

You have deductions in relation to deriving income under section   26AG of the Income Tax Assessment Act 1936 from the proceeds of a film: your tax loss may have a film component, which is deductible from your film income only.

Former Subdivision   375 - G

1.

A company is a pooled development fund (PDF) at the end of an income year for which it has a tax loss: it can only:

(a) deduct the loss while it is a PDF; or

(b) carry back the loss to an income year in which it was a PDF.

Sections   195 - 5 and 195 - 37

2.

A company becomes a PDF during an income year: special rules affect how it works out a tax loss and how the loss is utilised.

Section   195 - 15

1.

A limited partnership that has a tax loss becomes a VCLP, an ESVCLP, an AFOF or a VCMP: it cannot:

(a) deduct the loss while it is a VCLP, an ESVCLP, an AFOF or a VCMP; or

(b) carry back the loss to an income year in which it was not a VCLP, an ESVCLP, an AFOF or a VCMP.

Subdivision   195 - B

1.

An entity that has a tax loss becomes a foreign hybrid: it cannot deduct the loss while it is a foreign hybrid.

Section   830 - 115

1.

A trust has had a change of ownership or control or there has been an abnormal trading in its units:

•   if this happens in the income year, it works out its net income and tax loss in a special way; or

•   if this happens at any time from the start of a loss year until the end of the income year, it cannot deduct a tax loss from the loss year.

This will not be the case if the trust is an excepted trust. However, if it became one by making a family trust election, a special tax may be payable on certain distributions and other amounts.

Divisions   266, 267 and 268 in Schedule   2F to the Income Tax Assessment Act 1936

2.

A trust is involved in a scheme to take advantage of deductions. The trust may be prevented from making full use of them.

Division   270 in Schedule   2F to the Income Tax Assessment Act 1936

3.

A trust is a designated infrastructure project entity.

Subdivision   415 - B

1.

A greenfields minerals explorer creates exploration credits.

Section   418 - 95