Income tax: When an additional tax loss is transferred pursuant to Subdivision 170-A of the Income Tax Assessment Act 1997 (ITAA 1997) from the same 'loss company' to the same 'income company' in respect of the same income year as a previous loss transfer, what is the amount to be specified in the written agreement to be made under paragraph 170-50(2)(b) of the ITAA 1997 for that transfer?

The further agreement should only specify the additional amount of tax loss being transferred.

Paragraph 10 of Taxation Ruling TR 98/12 states that: 'A loss company may also enter into a further transfer document with an income company to which it has already transferred a part of its loss in the relevant income year. This is on the condition that a part of the total loss remains available for transfer and there is sufficient net assessable income within the income company to absorb the additional transfer. ...'

A further agreement cannot involve the revocation of any prior agreement between the relevant companies. As explained in paragraph 11 of TR 98/12: ' ...There is no provision within section 80G (Subdivision 170-A) that permits the revocation of a valid transfer document...'

Any amount of tax loss transferred by the loss company is deemed not to have been incurred by the loss company to the extent of that amount (subsection 170-20(2) of the ITAA 1997) and therefore cannot be included in any further agreement. Thus the further agreement is a completely separate agreement from the initial agreement between the loss company and the income company.

To the extent that the principles in Subdivision 170-A are the same as those in: • Subdivision 170-B of the ITAA 1997 (in respect of net capital losses); • Section 80G of the Income Tax Assessment Act 1936 (ITAA 1936); or • Section 160ZP of the ITAA 1936; the above discussion of Subdivision 170-A applies equally to that provision.

This Determination applies to years commencing both before and after its date of issue. However, it does not apply to taxpayers to the extent that it conflicts with the terms of settlement of a dispute agreed to before the date of the Determination (see paragraphs 21 and 22 of Taxation Ruling TR 92/20).