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Incorporation of Professional Practices

Published on 15 Apr 2011 | Took place at McCullough Robertson, Brisbane, QLD

Incorporation of professional practices has become a topical issue in recent years for a number of reasons: relaxation of professional body requirements, the ATO focus on service entities, reduction and planned elimination of stamp duty on business transfers, and limitation of liability issues.

The ATO has now issued its long-anticipated draft determination regarding the CGT consequences of the incorporation of no-goodwill professional practices. The draft determination confirms that the market value substitution rule won't be applied to the “ebb and flow” of shareholders in an incorporated professional practice, subject to specific restrictions. In addition, there are important matters left unaddressed by the draft determination that should concern all practitioners working in this area.

This event covered:

  • the current position for transactions affecting goodwill under the Queensland Duties Act, pending the abolition of business duties in 2013
  • the specific parameters for relying on the draft determination, the consequences of breaching any of those parameters and what the administrative approach means in practice
  • considered the recent pronouncements of the ATO directed at professional firm structuring and incorporation processes.

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

Individual sessions

Incorporation of professional practices

Author(s):  Chris Davis

This presentation covers:

  • setting the scene, revisiting the issues with service entities
  • service entities: Are they still viable?
  • what sort of structuring is permissible for lawyers and accountants?
  • recent ATO announcements on things it is focussing on
  • what is the scope of Part IVA applying to incorporations?
Materials from this session:

Goodwill under the Qld Duties Act

Author(s):  Harry LAKIS

This presentation covers:

  • the future of business duties
  • current dutiable property
  • draft ruling on goodwill
  • large partnership methodology
  • small partnership methodology
  • criticism of the ruling methodology.
Materials from this session:

Incorporation of professional practices TD 2011/D3

Author(s):  Mark MOLESWORTH

This presentation covers:

  • not apparent from the ruling
  • ATO view on scope of IT2540:
    • concession as to fact of market value only
    • concession only in context of nil consideration
    • concession only for “ebb and flow” of partners
  • genesis of TD 2011/D3:
    • cut out of omnibus ruling
    • representations from law firms/societies/institutes
    • “replication” of IT2540.
Materials from this session: