Miscellaneous 2022

Unknown unknowns with unconsolidated clients

Source: The Tax Specialist Journal Article

Published Date: 1 Apr 2022


The consolidation provisions represent a combination of legal, accounting and economic concepts that are enacted in both prescriptive detail and broad principle. This presents difficulties for all taxpayers, but especially groups in the small-to-medium enterprise (SME) markets. Entry into consolidation is difficult for groups that utilise hybrid company/trust structures, or those that have an insufficiency of those attributes that enable entry into consolidation without detriment. These kinds of groups and entities dominate the SME sector. While a number of amendments have made the process of consolidating easier, this has caused detriment to the integrity of the consolidation framework. There have been informed recommendations for reforms that would better facilitate consolidation for the SME sector, but no action has been taken. This article considers the reasons consolidation can be difficult for an SME and what can be done under the existing law to mitigate the problems of consolidation for an SME group.

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Miscellaneous 2022

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