Published on 18 Oct 08
by TASMANIAN DIVISION, THE TAX INSTITUTE
A buy-sell agreement is an agreement under which the proprietors of a business contract to buy the equity or interest of another proprietor in the event of death/trauma or total or permanent disablement. To finance the transfer or the equity, the parties usually take out some form of insurance. This paper looks at key tax and commercial issues associated with buy-sell agreements, with special focus on:
self insurance and insurance trusts
using super funds for this purpose
share buy-back and unit redemption traps
when equity is held by trusts but insurance proceeds are paid to individuals.
Paul Hockridge FTIA is a Tax Partner at Deloitte with over 30 years
experience in Tax, asset protection, estates-succession planning,
FBT and salary packaging. Paul specialises in advising high wealth
families and closely held businesses and advises mainly accounting
and law firms. Paul is a member of various professional association
committees and has been involved in consultation with both Federal
and State Governments on a variety of tax matters. Current at 17 October 2008
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
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