Consolidation 2013

How to get the best deal for SME clients using tax consolidation

Source: Taxation In Australia Journal Article

Published Date: 1 Aug 2013


When a small to medium business (SME) is proposed to be sold, taxation considerations can produce a disconnect between seller and buyer; the buyer may prefer an asset deal, while the seller will often have a very strong tax-based preference for a share (or unit) deal. The purpose of this article is to identify ways in which the consolidation regime can be used for either party’s benefit. For the seller, it can make a share deal palatable to the buyer, and can make the due diligence process simpler. For the buyer, it can provide a level of comfort as to how tax history is addressed and can help ensure that the tax and duty outcomes are at least as good as they would have been in an asset deal.

The author argues that there are significant potential opportunities for practitioners in being aware of how consolidation can work well for SME clients looking at a transaction.

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Consolidation 2013

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