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Everything There is to Know About Company Losses and Tax

Published on 27 May 2009 | Took place at RACV Club, Melbourne , VIC

This event gave delegates knowledge to advise companies interested in protecting their positions or attempting to value the losses that stand to be acquired through M&A activity.

Get a 20% discount when you buy all the items from this event.

Individual sessions

The continuity of ownership test under Division 165

Author(s):  Andrew VAN DINTER,  Brian LANE

This paper covers the continuity of ownership (COT) under Division 165, including:

  • the differences in testing for tax losses, net capital losses and bad debt deductions
  • the concepts of voting power, dividend rights and capital rights, and how they raise difficulties for companies with multiple classes of shares
  • how the same share rule can make it more difficult to utilise a loss (together with the saving exception to the rule)
  • when it is "reasonable" in tracing ownership to conclude that the COT has been satisfied.
Materials from this session:

The same business test under Division 165

Author(s):  Andrew WOOLLARD,  Brian LANE

This paper covers the same business test (SBT) under Division 165, including:

  • when is it "practicable" to assume COT failure?
  • the issues raised by the new business and transactions tests
  • what exactly is the ATO's position under Taxation Ruling TR 1999/9?
  • a review of the recent case law, including R & D Holdings, Lilyvale Hotel and Coal Developments (German Creek).
Materials from this session:

Losses and tax - The loss integrity measures

Author(s):  Enzo COIA

This paper covers the following integrity measures:

  • inter-entity loss duplication under Subdivision 165-CD, including the following issues:
    • how the ATO's view of duplication differs from the general view?
    • what is an economic loss?
    • the differences between the individual and global approaches to asset measurement
  • the same business test for unrealised losses under Subdivision 165-CC and
  • loss deferral under Subdivision 170-D.
Materials from this session:

Recouping tax losses under Division 166

Author(s):  Martin FRY,  Jeanelle MENEZES

This paper covers:

  • the role of Division 166
  • the companies to whom Division 166 applies
  • how Division 166 modifies the basic continuity of ownership test
  • corporate change
  • the tracing concessions
  • the stakeholder thresholds of the concessional tracing rules
  • the no detriment rule: section 166-275
  • interposition of a new entity between notional shareholders.
Materials from this session:

Losses and consolidation - Entries and exits

Author(s):  Duncan R C BAXTER

This paper covers the losses issues raised when an entity joins or leaves a consolidated group, including:

  • do losses transfer into a consolidated group?
  • how is a transferred loss utilised (as compared with other losses)?
  • calculating and allocating the joining ACA for a loss company and
  • calculating the cost base of the shares in a leaving company (including a consideration of whether a loss on a share sale can ever result).
Materials from this session: