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Reviewing Earn-Outs and other Practical Issues when Buying and Selling Businesses

Published on 24 Jul 2008 | Took place at Kooyong Tennis Club, Melbourne, VIC

Every day, we are asked to advise our clients on buying or selling businesses. As these transactions become more complex, the taxation implications become more and more difficult. Some questions that may pop up include:

  • have we structured the sale or purchase in the most tax efficient manner?
  • what issues would the other side's tax adviser raise and how should we respond to protect our client's interests?
  • what are the implications of earn-outs, both from the vendor and the purchaser's perspective and how do we apply Taxation Ruling 2007/D10 to get the best outcome for our client?
  • what is the commercial lawyer's role and why should I care?
This event canvassed these and many other issues, with a particular focus on how to practically apply the Commissioner's earn-outs ruling.

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

Individual sessions

Earn-outs and other issues for vendors

Author(s):  Greg THOMPSON

This paper covers: 

  • structuring earn-outs to maximise value for the vendor
  • pre-sale structuring
  • sale of business v shares
  • strategies to reduce capital gains
  • dealing with pre and post CGT assets.
Materials from this session:

Structuring for investment: A purchaser’s perspective

Author(s):  Jeffrey CHANG

This paper covers: 

  • structuring earn-outs to maximise value for the purchaser
  • the tension between purchasing assets versus shares
  • what acquisition vehicle is the most appropriate?
  • apportionment of the purchase price - should it be included in the contract or not?
Materials from this session:

Indirect tax issues on buying and selling businesses

Author(s):  Andrew SPALDING

This paper covers:

  • GST and stamp duty applicable to earn-out arrangements
  • GST and going concern exemption
  • financial supplies and claiming input tax credits on acquisitions
  • stamp duty tricks and traps
  • mortgage duty.
Materials from this session:

Risk shifting: Legal issues that you must consider

Author(s):  Simon JAY

This paper covers: 

  • what are risk shifting clauses, how do they work and why do they matter?
  • limitation and exclusion of liability
  • warranties and indemnities.
Materials from this session: