Private ruling: Company Losses on Consolidation - Same Business Test
Published: November 2013

Ruling: The ruling concerned the following: | 1. Will unutilised tax losses that were incurred by Company A for the 2011 income year and part of the 2012 income year, satisfy the modified same business test (modified SBT) under section 707-125 of the Income Tax Assessment Act 1997 (ITAA 1997) so that Company A can transfer its tax losses for those periods to Company B as the head company of the Company B consolidated group at the joining time? | 2. Will unutilised tax losses that were incurred by Company A for the income years ended 2007 to 2010 satisfy the modified SBT under section 707-125 of the ITAA 1997 so that Company A can transfer its tax losses for those years to Company B as the head company of the Company B consolidated group at the joining time? | Decision | The Commissioner ruled that: | 1. Yes. The modified SBT under section 707-125 of the ITAA 1997 was satisfied. Therefore, Company A can transfer its tax losses for the 2011 income year and part of the 2012 income year to Company B as the head company of the Company B tax consolidated group. | 2. No. The modified SBT under section 707-125 of the ITAA 1997 was not satisfied. Therefore, Company A cannot transfer its tax losses for the income years ended 2007 to 2010 to Company B as the head company of the Company B consolidated group.