The Australian Taxation Office (ATO) has published new guidance, with examples, on how to change a loss carry back choice and whether a change will affect assessments for subsequent income years. The primary guidance is as follows:

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Change in loss carry back choice

How to change your loss carry back choice and whether a change will affect your assessments for subsequent income years.

Changing loss carry back choice

When you made your original loss carry back choice, you specified how much of the tax loss from a particular income year you were carrying back to an earlier income year. If you want to change your loss carry back choice, it:

• needs to be made
  • in the approved form
  • within your time limit for amending your tax assessment
• will take effect from the day you made your original loss carry back choice.

Changing the loss carry back choice for an income year may also affect your assessments for subsequent income years.

Correcting error in choice to carry back more than the tax loss amount for a year

You cannot use this schedule to change an amount of tax loss that you chose to carry back if that specified amount of tax loss exceeded the correct amount of tax loss for that income year.

If you need to make a choice to carry back the correct amount of tax loss, and you are:

• a tax practitioner, engage with us through the tax practitioner assistance service or phone us on 13 72 86 (and select the relevant Fast Key Code)
• a business taxpayer, phone us on 13 28 66.

Approved form

To notify us of a change to a loss carry back choice, you will need to:

• complete the relevant Loss carry back change in choice schedule, using
  • the Loss carry back change in choice schedule 2021 to change the loss carry back choice you made for the 2020–21 income year
  • the Loss carry back change in choice schedule 2022 to change the loss carry back choice you made for the 2021–22 income year
• lodge it with your amendment request for Company tax return for the income year that you are changing your choice.

Effect on subsequent income years

Changing the loss carry back choice for an income year takes effect from the day you made your original loss carry back choice. This may affect:

• the amount of tax losses available to be carried forward to use in a later income year
• a loss carry back choice for subsequent income years.

Lodge an amendment request to any company tax returns that you have lodged for a subsequent income year that are affected by the change you made to your original loss carry back choice.