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 same business test

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

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

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

             (6)  Apply the * same business 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.