(1) If:
(a) a company can deduct a debt (or part of a debt) that it wrote off as bad in an income year; and
(b) because the company failed to meet a condition in section 165 - 123 (about the company maintaining the same owners), it could not have deducted the debt (or part) apart from section 165 - 126 (about the company satisfying the business continuity test); and
(c) the company wrote off the debt after the * test time worked out under section 165 - 126; and
(d) because of the deduction, the company has a * tax loss for that income year, or there was an increase in the amount of its * tax loss for that income year; and
(e) the company carried on a * business during that income year for the purpose, or for purposes including the purpose, of securing a deduction for the debt (or part) by relying on section 165 - 126;
the company cannot deduct the * tax loss for a later income year, or cannot deduct it to the extent of the increase, unless it also satisfies the * business continuity test for the later income year (the business continuity test period ).
(2) Apply the test to the * business that the company carried on immediately before the * test time worked out for section 165 - 126.
For the business continuity test: see Subdivision 165 - E.
Table of sections
The primary and alternative tests
165 - 150 Who has more than 50% of the voting power in the company
165 - 155 Who has rights to more than 50% of the company's dividends
165 - 160 Who has rights to more than 50% of the company's capital distributions
165 - 165 Rules about tests for a condition or occurrence of a circumstance
165 - 175 Tests can be satisfied by a single person
Rules affecting the operation of the tests
165 - 180 Arrangements affecting beneficial ownership of shares
165 - 185 Shares treated as not having carried rights
165 - 190 Shares treated as always having carried rights
165 - 200 Rules do not affect totals of shares, units in unit trusts or rights carried by shares and units
165 - 202 Shares held by government entities and charities etc.
165 - 203 Companies where no shares have been issued
165 - 205 Death of share owner
165 - 207 Trustees of family trusts
165 - 208 Companies in liquidation etc.
165 - 209 Dual listed companies