OB 83Group companies transferring imputation credits with transfer of tax loss

1. When a company that is an ICA company (the loss company) makes a tax loss available under section IC 5 (Company B using company A’s tax loss) to another ICA company (the profit company) for a tax year, the loss company may choose that the loss company or another company meeting the requirements of subsection (5) be able to transfer, when or after the tax loss is made available, imputation credits to the profit company.

2. Subsection (1) does not apply if the loss company and profit company are members of the same wholly-owned group of companies.

3. The amount of imputation credits for which the loss company makes the election in subsection (1) is calculated using the formula—

   $(loss\; offsets\; +\; subvention\; payments)\; \times \; tax\; rate.$

   Where:

4. In the formula,—

5. loss offsets is the amount of tax loss that is subject to the election under section IC 5(2)(a) made by the loss company in favour of the profit company:
6. subvention payments is the amount of the payments referred to in section IC 5(2)(b) made by the profit company to the loss company in relation to the tax loss:
7. tax rate is the basic rate of income tax set out in schedule 1, part A, clause 2 (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits) for the tax year.

8. A company that is an ICA company may transfer imputation credits to the profit company under the election in subsection (1) if—

9. the company is the loss company or has an ownership interest in the profit company of 66% or more; and
10. the company is a member of a group of companies that includes the loss company and the profit company; and
11. there is no wholly-owned group of companies that includes the company and the profit company or the loss company and the profit company; and
12. the company, the loss company, and the profit company meet the requirements of section OA 8 (Shareholder continuity requirements for memorandum accounts) for the carrying forward of imputation credits during the period beginning from the end of the income year in which the tax loss arises and ending with the transfer of the imputation credits; and
13. the transfer occurs in the period of 4 income years beginning from the end of the income year in which the tax loss arises; and
14. notice of the election meeting the requirements of section OB 84 is given to the Commissioner.

15. When a company transfers imputation credits to the profit company under the election in subsection (1), the profit company must pay a dividend at the time of the transfer and must attach to the dividend the amount of imputation credits transferred to the profit company.

16. The total amount of imputation credits transferred under the election in subsection (1) may be less than or equal to the amount given by subsection (3) for the election.

17. If a loss company makes an election under subsection (1) relating to a tax loss for a tax year that is made available to more than 1 profit company and the amount of tax loss made available to a profit company is reduced under section IC 11 (Reduction of amounts used by companies), the maximum amount of imputation credits able to be transferred to the profit company under the election is reduced by the same proportion as the amount of tax loss made available to the profit company is reduced under section IC 11.