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2nd National Consolidation Symposium: After the Big Bang: The expanding universe of Tax Consolidation

Published on 19 May 2005 | Took place at Sheraton on the Park, Sydney, National

Having elected to consolidate, and completed the exhausting formation calculations, corporate Australia is now starting to realise that there is still much more to the tax consolidation regime!

This symposium primarily focussed on post-formation issues being faced by consolidated tax groups. These not only encompass aspects such as acquiring and disposing of subsidiaries, but also financing, internal restructuring and the ongoing implications of interactions between the consolidation provisions and other tax provisions (including Part IVA).

The post-formation period will also inevitably involve a review of the formation calculations and market valuations by way of tax audits or by companies otherwise reassessing their stick/spread choices prior to 31 December 2005. Therefore the program included an update on developments in these areas.

There were also be a number of industry specific sessions, including one covering issues facing SMEs.

Get a 20% discount when you buy all the items from this event.

Individual sessions

Intra-group transactions - are they now irrelevant?

Author(s):  Ken SPENCE

This presentation covers the following topics:

  • Under the single entity rule, are all future intra-group transactions irrelevant from an income tax perspective?
  • If not, which transactions are of concern or an opportunity and why?
Materials from this session:

Financing implications

Author(s):  Peter COLLINS

This presentation covers the:

  • single entity rule
  • tracing and pooling of funding
  • interest, FX, hedging and capital raising
  • debt funded reorganisations
  • equity injections
  • franking
  • IFRS impacts.
Materials from this session:

Tax sharing agreements - theory and practice

Author(s):  Matt HAYES

This presentation covers:

  • theory - the law (including recent legislative amendments)
  • practice
    • recent ATO guidance
    • TSA drafting issues
  • future developments - IFRS and its impact on TSAs and tax funding arrangements.
Materials from this session:

RITA and NITA - some emerging issues around the new consolidations regime

Author(s):  Alf CAPITO

This presentation covers:

  • impact on dividend and branch exemptions
  • impact on CFC rules
  • impact on deductibility of head office and similar expenses
  • impact on deductibility of finance costs and FX issues.
Materials from this session:

Acquisitions and disposals - specific contractual clauses and considerations

Author(s):  Richard HENDRIKS

This presentation covers the following topics:

  • when does ownership change?
  • time of day issues including entry into consolidation, time zones
  • indemnity clauses and representations and warranties
  • interaction with tax sharing agreements and tax funding agreements.
Materials from this session:

Getting the most out of your 'tax cost setting amount'

Author(s):  Hayden SCOTT

This presentation covers:

  • why can't things like Division 43 and Subdivision 40-F deductions be reset?
  • why can't the TCSA of bad debts, consumables and WIP receivables be deducted?
  • what happens to the TCSA received by FITBs and FX receivables?
  • how does the tax cost setting process apply to derivatives?
Materials from this session:

Is there really a calm after the formation storm?

Author(s):  Richard BUCHANAN,  Paul CULIBRK

This presentation covers the following:

  • how do you deal with identified errors in the formation ACA calculation and what does IFRS mean to step 2 and 3 of the formation ACA calculation?
  • what strategies can be adopted in managing your post formation position?
Materials from this session:

Losses: re-evaluating available fraction choices

Author(s):  David ROMANS

This presentation covers:

  • re-evaluating your utilisation choices
  • subsequent adjustments to pre-consolidation losses
  • bad debts
  • proposed COT / SBT reform.
Materials from this session:

Consolidation: the risk reviews

Author(s):  Peter COAKLEY

This presentation covers:

  • demographics of groups in the consolidation regime
  • the Tax Office risk review program
  • the risk review process
  • the potential risks so far
  • the future risk review and audit programs for consideration - some initial thoughts.
Materials from this session:

CGT interactions

Author(s):  Grant CATHRO

This presentation covers:

  • straddle transactions
    • sales and acquisitions entry
    • sales and acquisitions exit
  • integrity loss interaction
    • are losses on exit denied by 165-CD?
    • 165-CD and disposals
    • 170-D operation.
Materials from this session:

Acquisitions: tax structuring and IFRS accounting

Author(s):  Trevor HUGHES

This presentation covers:

  • accounting for acquisitions - shares, assets and joint ventures
  • impact on tax outcomes and price
  • impact of IFRS on acquisitions from 1 January 2005
  • which accounting standards apply
  • acquisition issues involving provisions, contingencies, intangible and impairment testing
  • impact of reverse acquisitions
  • deferred tax accounting.
Materials from this session:

Valuations: best practice and best defence against disputes

Author(s):  Jim DELANY,  John HOPE

This presentation covers:

  • the initial consolidation valuation
    • risk based approaches for valuation support
    • internal or external valuations or both?
    • issues of fact, judgement and interpretation.
  • if it goes wrong:
    • valuations and litigation
    • briefing expert witnesses
    • balancing expert witnesses' duties and client interests
    • detailed evidence, approaches and alternate values
    • experts' conferences, joint reports and 'hot tubs'.
Materials from this session:

Consolidation: SME issues

Author(s):  Gordon S COOPER,  Gerald JAWORSKI,  James TARGETT

This presentation covers:

  • pre CGT factors
  • entry issues
  • losses
  • exit issues
  • Part IVA.
Materials from this session:

The intent of the consolidation regime

Author(s):  Michael D'ASCENZO

This presentation covers:

  • the principles of consolidation
  • the ATO's current state in respect of consolidation
  • active compliance work
  • consolidation's policy impacts
  • Tax Office guidance
  • reducing risk.
Materials from this session:

Leaving entities

Author(s):  Andy MILTON,  Tony STOLAREK

This presentation covers:

  • traps in building up the exit cost base
  • calculating the gain, is it capital, revenue, pre-CGT?
  • partial divestments and the issues
  • IFRS and leaving calculations
  • recognising assets and liabilities on leaving.
Materials from this session:

Mining industry tax consolidation issues

Author(s):  Michael MCCORMAK,  Mark MURCHISON,  Anthony PORTAS

This presentation includes:

  • allowable capital expenditure and exploration assets
  • foreign exchange cash and receivables
  • consumables
  • Division 702.
Materials from this session:

Foreign owned groups

Author(s):  Geoff LEHMANN,  Jenny WONG

This presentation covers:

  • formation issues for MEC groups
  • ongoing issues for MEC groups
  • problems unique to MEC groups.
Materials from this session: