COVID-19 and loss utilisation

Some businesses have changed the way they operate due to COVID-19. Many have had to make sudden changes to their business model or activities, while others have had to close temporarily. Some changes may affect whether businesses can utilise their carried-forward losses in the current or a future income year. For companies to utilise their carried-forward losses in a particular year, they need to satisfy the continuity of ownership test, or COT If they fail the COT, they then need to satisfy the business continuity test or BCT. Whether a company can utilise carried-forward losses requires a consideration of its facts and circumstances. Generally, a company that has completely closed its business with no intention to resume will fail the BCT. However, a company that has temporarily closed its business may still be able to satisfy the BCT. Qualifying for and receiving JobKeeper payments will not cause a company to fail the BCT.