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Edited version of your written advice
Authorisation Number: 1051215685303
Date of advice: 20 April 2017
Ruling
Subject: Application of the Same Business Test
Question
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?
Answer
No.
This ruling applies for the following periods:
1 January 2017 to 31 December 2021
The scheme commences on:
In the income year ending 31 December 2017
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
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.