Is dockyard entitled to a deduction for these amounts

Reference no: EM133062416

Question: Dockyards Pty Ltd operates a large shipbuilding concern in Newcastle but ceased operations shortly before Christmas due to a sudden downturn in orders. By the new year, all the company's assets had been disposed of and Dockyard (Investments) Pty Ltd was incorporated as a subsidiary company to invest the proceeds of sale. Because of the close connection between the two companies the latter company paid workers' compensation claims which arose for settlement after the former company had been wound up.

Is Dockyard (Investments) entitled to a deduction for these amounts?

Reference no: EM133062416

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