Small business restructure: Is it genuine?
Source: Taxation In Australia Journal Article
Published Date: 1 Apr 2017
The small business restructure roll-over came into effect on 1 July 2016, allowing small businesses to restructure their affairs without incurring an income tax liability. Despite its usefulness to small businesses, caution must be taken in electing to apply this roll-over, as the anti-avoidance provisions continue to apply.
This article considers the meaning of genuine restructure in the provisions and attempts to predict the court's interpretation of the genuine restructure requirement. In doing so, the application of the roll-over and eligibility requirements will be outlined. Both sides of the interpretative debate will then be analysed and considered against the principles of statutory interpretation adopted by the High Court since the 1970s and 1980s. This analysis suggests that if the genuine restructure requirement is litigated, it will be interpreted to exclude a change of structure solely entered into to eliminate or defer tax liability. That is, the roll-over will be read together with the anti-avoidance policy underlying the income tax Acts.
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Details
- Published By: Elissa Morcombe
- Published On:1 Apr 2017
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