Roll-overs for private group restructures: navigating consolidation and Division 7A intersections
Published Date: 27 Feb 2026
Private group restructures present significant technical challenges where roll-over provisions, Div 7A of the Income Tax Assessment Act 1936 (Cth) and tax consolidation intersect. This article examines five major roll-over regimes and analyses their interaction with integrity measures and cost-setting rules. Two fundamental problems emerge: the step 3 limitation often excludes pre-existing retained earnings from allocable cost amount (ACA) calculations when consolidation occurs immediately after restructure, while goodwill drag away sees high-value internally generated goodwill absorb disproportionate ACA from deductible assets such as trading stock, and plant and equipment. Each roll-over pathway produces materially different outcomes, despite economically equivalent transactions. Careful structural planning is essential to achieve tax-efficient results in private business reorganisations, since no universal solution exists for all circumstances.
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- Published By: James Hudson
- Published On:27 Feb 2026
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