Private ruling: Modified same business test (SBT)
Published: October 2012
Ruling period: 1 July 2007 to 30 June 2012.
Date scheme commenced: 2007

Ruling: Q1: Whether DCo, as head company of the DCo group, will be entitled to utilise the carry forward tax losses on the basis that the requirements of section 707-125 of the ITAA 1997 have been satisfied? | A1: Yes

Relevant facts and circumstances: Originally, ACo was wholly-owned by BCo, which is part of the CCo consolidated group. Later, DCo acquired a substantial stake in ACo. Thus, ACo exited the CCo consolidated group. When ACo left CCo group, it had no tax losses. The tax losses only resulted from the period when DCo acquired an ownership stake in ACo. DCo later increased its stake in ACo to 100%, such that ACo then joined DCo consolidated group.

Relevant legislative provisions: Income Tax Assessment Act 1997 Section 707-120 | Income Tax Assessment Act 1997 Section 707-125

Reasons for decision: Summary: On the basis that ACo has satisfied all of the requirements pursuant to section 707-125 of the ITAA 1997, it is considered that DCo, as head company of the DCo group, will be entitled to utilise the carry forward tax losses made by ACo.

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