Commonwealth of Australia Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 165.132

             (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 same business 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 * same business test for the later income year (the same business 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 same business 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 beneficial owner

165-207    Trustees of family trusts

165-208    Companies in liquidation etc.

165-209    Dual listed companies

The primary and alternative tests