Published on 10 Aug 07
by WESTERN AUSTRALIAN DIVISION, THE TAX INSTITUTE
Removing funds from a controlled company - and not suffering a hefty tax penalty in the process is no easy matter. At least three different tax dangers have to be negotiated – avoiding additional tax on the Company, avoiding further tax on the shareholder and avoiding a penalty debit to the company's franking account. This paper looks at a few of the possibilities for a satisfactory outcome, and some of the dissonant dangers that lurk in this territory:
- accessing retained earnings
- avoiding the wash-out of concessions
- dividends and dividend access shares
- stripping and streaming rules
- capital reductions - is this feasible for SMEs?
- loans out
- liquidation of companies
- redundancy payments and other benefits
- FBT issues.
Prof Graeme Cooper, CTA, is Professor of Taxation Law at the University of Sydney and a consultant to Greenwoods & Herbert Smith Freehills. He is a former New South Wales State Council Chairman of The Tax Institute and currently a member of the National Council. He has worked as a consultant to the ATO, Treasury, Board of Taxation, United Nations, OECD, World Bank and International Monetary Fund. He was admitted to legal practice in New South Wales (1980) and Victoria (1999), and practised commercial law and tax in Sydney before entering teaching. He has taught tax in law schools in Australia, Europe and the United States, and holds degrees from the University of Sydney, University of Illinois and Columbia University, New York.
- Current at
07 September 2017