This draft interpretation statement intends to provides guidance on how the main aspects of the business continuity test in s IB 3 of the Income Tax Act 2007 apply. The business continuity test may enable a company to carry forward tax losses despite a breach in ownership continuity if certain requirements are satisfied. 

The Statement provides detailed guidance on the application of the new business continuity test.  It includes an in-depth discussion on the nature of a company’s business activities, what constitutes a major change of those activities and what are the permitted major changes.  The concepts are illustrated using practical examples. The statement will be a useful resource for taxpayers and their advisers.  Overall, we support its publication.