Removing funds from companies presentation

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 presentation 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.

Author profile

Prof Graeme Cooper FTI

Graeme is Professor of Taxation Law at the University of Sydney and a consultant to Greenwoods & Herbert Smith Freehills. He is a former Chair of the New South Wales State Council of The Tax Institute and former member of the National Council. He has worked as a consultant to the ATO, Treasury, Board of Taxation, United Nations, OECD, World Bank, the International Monetary Fund and several foreign governments. He was admitted to legal practice in New South Wales and Victoria, and practised commercial law and tax in Sydney before entering teaching. He has taught 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 27 May 2021

More by Graeme S COOPER

• The curious reform of foreign source income - 01-August-2018
• The new s 974‑80 – more obscure than ever - 01-December-2017
• Part IVA - With small business slant paper - 01-May-2014
• Seeing the bigger picture - 01-June-2013
• Implementing an allowance for corporate equity - 01-April-2012
• The Part IVA deluge paper - 19-May-2011
• Removing funds from a company - some of the hidden dangers paper - 10-August-2007
• Getting wealth out of companies paper - 03-May-2007
• The emerging High Court jurisprudence on Part IVA - 01-June-2006
• Part IVA - a post-Hart report card paper - 19-March-2005
• The Position of Losses in Australian tax History - 27-November-2003
• Why GST is not a Consumption Tax - and why it matters seminar paper - 10-October-2003
• Unwanted Company? CGT and Dividend Issues on Exiting Private Companies seminar paper - 12-September-2003
• Capital vs Income: Case Studies - 28-November-2002
• Capital vs Income - 28-November-2002
• Capital versus income - 18-October-2002
• Structures for business and investment - 17-May-2002
• Capital vs income dichotomy - 02-May-2002
• How well does TVM express the current income tax base? - 01-July-2001
• CGT Update - Changes in Ownership - 09-September-1999
• Rulings - 05-August-1999
• Review of Final Legislation - 03-August-1999
• CGT the case study way: goodwill and rollovers - 24-March-1999

Click here to expand/collapse more articles by Graeme S COOPER.