Section 36‑25 Special rules about tax losses - Income Tax Assessment Act 1997 - 36‑25 Special rules about tax losses

36‑25 Special rules about tax losses36‑25 Special rules about tax losses

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Tax losses of individuals

Item	For the special rules about this situation ...	See:
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

Tax losses of companies

Item	For the special rules about this situation ...	See:
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

Tax losses of corporate tax entities

Item	For the special rules about this situation...	See:
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)

Item	For the special rules about this situation ...	See:
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

Item	For the special rules about this subsection...	See:
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