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Company losses and executive margin loan

Discussion in 'Accounting, Tax & Legal' started by Rob G., 25th May, 2008.

  1. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    Hi Forum,

    Thought for the day ...

    Companies can only carry forward tax losses to future income years if they either pass the continuity of ownership test or the same business test.

    The continuity of ownership requires more than 50% of the original share holders at the time of loss to still beneficially hold their shares in the income year.

    It refers to EXACTLY THE SAME SHARES.

    Question: Does taking a margin loan (remaining beneficial owner) where the lender participates in a share lending sheme mean DIFFERENT shares are returned ?????

    CGT has already been modified for noxious share lending practices, just wondering if there is any unpleasant side-effects for the company where significant shareholders have borrowed ?

    Cheers,

    Rob