Episode notes
While tax losses are never fun to incur, there is a bright side to them - they can be used to lower the tax payable on future profits. However, the ATO requires certain criteria to be met before a loss can be used.
In the case of companies, there are two tests they are subjected to in order to be able to offset prior year tax losses against future taxable income: the Continuity of Ownership Test, and the Similar Business Test.
Only one of the two tests needs to be passed, with the Similar Business Test only required if the company fails the Continuity of Ownership Test.
The Continuity of Ownership Test is pretty self-explanatory; however, the Similar Business Test is not so straightforward...
Louie is back in full voice and back with Senior Client Manager Nihit Mittal to help explain these two different tests, and what has ...
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