Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 166.5

  (1)   This Subdivision modifies the way Subdivision   165 - A applies to a company that is:

  (a)   a * widely held company at all times during the income year; or

  (b)   an * eligible Division   166 company at all times during the income year; or

  (c)   a widely held company for a part of the income year and an eligible Division   166 company for the rest of the income year.

Note 1:   Subdivision   165 - A is about the conditions a company must meet before it can deduct a tax loss for an earlier income year.

Note 2:   A company can choose that this Subdivision is not to apply to it: see section   166 - 15.

Note 3:   See section   165 - 255 for the rule about incomplete income years.

Meaning of test period

  (2)   The company's test period is the period consisting of the * loss year, the income year and any intervening period.

Note:   See section   165 - 255 for the rule about incomplete test periods.

Substantial continuity of ownership

  (3)   The company is taken to have met the conditions in section   165 - 12 (which is about the company maintaining the same owners) if there is * substantial continuity of ownership of the company as between the start of the * test period and:

  (a)   the end of each income year in that period; and

  (b)   the * end of each * corporate change in that period.

Note:   See sections   166 - 145 and 166 - 175 to work out whether there is substantial continuity of ownership and a corporate change.

No substantial continuity of ownership

  (4)   The company is taken to have failed to meet the conditions in section   165 - 12 if there is no * substantial continuity of ownership of the company as between the start of the * test period and:

  (a)   the end of an income year in that period; or

  (b)   the * end of a * corporate change in that period.

Satisfies the business continuity test

  (5)   However, if the company satisfies the * business continuity test for the income year (the business continuity test period ), it is taken to have satisfied the condition in section   165 - 13.

Note 1:   For the business continuity test, see Subdivision   165 - E.

Note 2:   See section   165 - 255 for the rule about incomplete test periods.

  (6)   Apply the * business continuity test to the * business that the company carried on immediately before the earlier of the following times (the test time ):

  (a)   the end of the first income year;

  (b)   the first time in the test period that a * corporate change in the company * ends;

for which there is no * substantial continuity of ownership of the company as between the start of the * test period and that time.