The company loss recoupment rules are to be amended with effect from the 2011-12 income year to make it easier for companies to satisfy the continuity of ownership test in certain circumstances.  The rules will be modified so that ownership does not need to be traced through certain superannuation entities. 
Furthermore, the proposed changes will remove technical deficiencies in the modified rules for widely held entities where:

• an entity is interposed between certain stakeholders and the loss company in certain circumstances;
• an interposed entity demerges;
• an interposed foreign entity issues bearer depository receipts; or
• a corporate change arising from the issue of new shares happens.

The measure will also ensure that all membership interests held in an entity are treated as a single asset for the purpose of applying the low value asset exclusions under the loss integrity rules.