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Transacting in a Non-Consolidated Group

Published on 15 Jun 2004 | Took place at The Menzies Hotel, Sydney, NSW

For better or worse, consolidation has been studiously avoided by many advisers and their clients. The belief is consolidation is all too difficult and too expensive - 'it's really only valuable for the big end of town'. Yet businesses still want to accomplish the same kinds of outcomes that the old grouping system used to allow - income and loss equalization, tax free movements of assets, and so on.

These seminar materials look at whether it is possible to get the benefits of consolidation without all the fuss.

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

Individual sessions

Income equalisation within a corporate group

Author(s):  Peter COWDROY This paper looks at the scope for 'self-help solutions' to the effective repeal of the loss grouping system. Prior to the enactment of these rules, tax advisers well understood some of the options for income equalisation within a corporate group - how did they do it? How many of those strategies are still available in the face of:
- arm's length pricing rules - for income derived from associates, for expenses incurred to associates, for measuring the cost base of assets and the capital proceeds of sales
- the impact of the new debt-equity rules on options involving corporate financing opportunities
- the 'stop loss' rules
- the surviving rollover rules and where they can help
- and how does Part IVA fit into all of this?

Materials from this session:

Moving assets around a non-consolidated group

Author(s):  Paul LYON This paper looks at the 'value-shifting' rules. These rules were enacted as a counter to some of the consequences of moving assets (and then losses) within corporate groups. While the regimes which permitted these transactions to occur have now been removed, the rules survive and remain special impediments to the ability of taxpayers to moving assets around within groups. Where and how do they impact on opportunities to shift income and gains?

Materials from this session:

Efficient Business and Investment Structures

Author(s):  Yan WONG This paper looks at possible ownership structures that can be set up to maximise the flexibility for income redistribution within corporate groups. How should a business handle the many trade-offs - for example in trusts, the trade-off between flexibility and loss quarantining.

Part of this paper looks at the enactment of the so-called simplified imputation system which changed the position of companies - they now become both users as well as transmitters of franking credits. This paper looks at how the imputation system affects the ability of companies to pass income through chains of companies and other vehicles. It focusses especially on the recent amendments and new rules about losses arising from unusable franking credits.

Materials from this session: