Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 175.65

Capital loss injected into company because of available capital gain

  (1)   The Commissioner may * disallow a * capital loss of a company for an income year to the extent that the company would not have made the loss if it had not also made some or all of a * capital gain it made in that income year.

Note:   The disallowance may result in a tax loss for the income year: see section   175 - 75.

  (2)   The Commissioner cannot * disallow any of the * capital loss if:

  (a)   the * continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss being made; and

  (b)   the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective * shareholding interests in the company.

Note:   Section   175 - 100 allows the Commissioner to disallow a capital loss of an insolvent company.

  (3)   The continuing shareholders are the individuals who had * shareholding interests in the company both immediately before the * capital loss was made, and immediately afterwards.


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