Income Tax Assessment Act 1936

SCHEDULE 2F - TRUST LOSSES AND OTHER DEDUCTIONS  

Division 269 - Concepts and tests applied in Divisions 266 and 267  

Subdivision 269-F - Business continuity test  

SECTION 269-105   MODIFIED TEST FOR INCOME YEARS STARTING ON OR AFTER 1 JULY 2015  

Cases in which businesses need only be similar

269-105(1)    
A listed widely held trust also passes the business continuity test during a period (the business continuity test period ) in relation to a time (the test time ) and in relation to:

(a) a tax loss for a loss year starting on or after 1 July 2015; or

(b) net income for an income year starting on or after 1 July 2015; or

(c) a debt, incurred in an income year starting on or after 1 July 2015, that the trust writes off as bad; or

(d) a debt, incurred in an income year starting on or after 1 July 2015, in relation to which a debt/equity swap (within the meaning of section 63E ) occurs;

if throughout the business continuity test period it carries on a business (its current business ) that is similar to the business it carried on immediately before the test time (its former business ).

Relevance of being a trust

269-105(2)    
The mere fact of being a trust does not mean that the trust cannot carry on a business.

Matters to be considered

269-105(3)    
Without limiting the matters that may be taken into account in ascertaining whether the trust ' s current business is similar to its former business, the following must be taken into account:

(a) the extent to which the assets (including goodwill) that are used in its current business to generate assessable income throughout the business continuity test period were also used in its former business to generate assessable income;

(b) the extent to which the activities and operations from which its current business generated assessable income throughout the business continuity test period were also the activities and operations from which its former business generated assessable income;

(c) the identity of its current business and the identity of its former business;

(d) the extent to which any changes to its former business result from development or commercialisation of assets, products, processes, services or marketing or organisational methods of the former business.

Exception

269-105(4)    
However, the trust does not pass the business continuity test under this section if, before the test time, it:

(a) began to carry on a business it had not previously carried on; or

(b) in the course of its business operations, entered into a transaction of a kind that it had not previously entered into;

and did so for the purpose, or for purposes including the purpose, of being taken to have carried on throughout the business continuity test period a business that is similar to the business it carried on immediately before the test time.