(1) The Commissioner may * disallow a * capital loss of a company if:
(a) a person (other than the company) has obtained or will obtain a tax benefit in connection with a * scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital loss ) of the capital loss.
However, the capital loss may be disallowed only to the extent of the available capital loss.
(2) The Commissioner may * disallow * capital losses of a company (or parts of them) if:
(a) a person has obtained or will obtain a tax benefit in connection with a * scheme; and
(b) the scheme would not have been entered into or carried out if the company had not made some or all (the available capital gains ) of the * capital gains it made:
(i) before it made the capital losses; and
(ii) in the same income year as it made them.
The disallowed capital losses and parts of capital losses may exceed the amount of the available capital gains.
Note: The disallowance may result in a tax loss for the income year: see section 175-75.
(3) An expression means the same in this section as in Part IVA of the Income Tax Assessment Act 1936 .
(4) The Commissioner cannot * disallow under this section if:
(a) the person who has obtained or will obtain the tax benefit had a * shareholding interest in the company at some time during the income year; and
(b) the Commissioner considers the tax benefit to be fair and reasonable having regard to that shareholding interest.
Note: Section 175-100 allows the Commissioner to disallow the whole or part of any capital losses of an insolvent company.