Private ruling: Application of the Same Business Test
Date of advice: 20 April 2017
Published: September 2017
Ruling period: 1 January 2017 to 31 December 2021
Date scheme commenced: In the income year ending 31 December 2017

Ruling: Q1: Will Company A fail to satisfy the same business test (SBT) in sections 165-13 and 165-210 of the Income Tax Assessment Act 1997 (ITAA 1997) merely because of the Restructure Transaction? | A1: No.

Relevant facts and circumstances: Company A is an Australian tax resident public company and is the head company of an income tax consolidated group (Group A). Group A has a large amount of prior year tax losses. It proposes to engage in certain transactions as part of a business restructure (Restructure Transaction). Assumption Company A failed the continuity of ownership test in prior years.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 165-10 | Income Tax Assessment Act 1997 section 165-12 | Income Tax Assessment Act 1997 section 165-13 | Income Tax Assessment Act 1997 section 165-210

Reasons for decision: Summary: When a company seeks to deduct a prior year tax loss, and fails to meet the continuity of ownership test in section 165-12 of the ITAA 1997, the company must meet the SBT in section 165-13 of the ITAA 1997. To satisfy the SBT in the present case, Company A must satisfy all of the conditions in section 165-210 of the ITAA 1997. Based on the information provided, there is no evidence to indicate that the identity of Group A's business will change as a result of the Restructure Transaction. Therefore, Group A will not fail the SBT in sections 165-13 and 165-210 of the ITAA 1997 merely because of the Restructure Transaction.