After suspending business activities for a period
Scenario:
I voluntarily suspended the business activities in my company for just over a year due to my employment commitment. The company’s ABN was cancelled for the time and no company’s return was lodged. My business has started running again in the same manner after the one-year suspension, and nothing has been changed. Will the company be able to carry forward past losses to the future?
Explanation:
Losses can be carried forward if either the same business test or the continuity of ownership test are met (ITAA 1997 s 165-10). Even if the same business test is not met, the continuity of ownership test may be met (ITAA 1997 s 165-12 and 165-13). Therefore, if more than 50% of the shareholders of the company have remained the same from the time that the loss was made until now, then it will be possible for the losses of the company to be carried forward (ITAA 1997 s 165-12).