The Endgame - Extracting Value - The Tax Issues paper

Published on 25 Nov 07 by THE TAX INSTITUTE

The variety of corporate capital management strategies available to the expanding business continues to grow and the means by which enterprise value can be released have become increasingly sophisticated (as evidenced by the burgeoning number of ATOIDs on the subject). The High Court's decision in McNeil focused on one such approach only. This paper is about the taxation issues which arise when shareholder value is released; whether that be by a trade sale, listing or a continuing participation and includes a consideration of:

• Share sales (allocation of the purchase price and valuaton issues)
• Restraint of trade and exit payment
• Dividends, capital reductions and buy-backs
• Whare is learnt from Lend Lease?
• Earn outs and CGT issues
• Future take out - options issued at a discount
• What is learnt from McNeil through examining various forms of "equity" returns (eg rights, options)?

Author profile

Peter McKnoulty CTA

Peter is a Consultant at McCullough Robertson, having been a partner with the firm from July 1986 to December 2011. His practice focuses on tax and commercial law with an emphasis on estate planning, taxation, tax planning, business structuring, business succession and family business intergenerational transfer. He is also the Founder of Transition Planning Australia, which helps business owners, professionals and others to create a framework for the transition from business or full-time work to the next phase of their lives. TPA's belief is that everyone is entitled to a meaningful life after full-time work. Peter has degrees in Commerce and Law (with Honours) from the University of Queensland. - Current at 12 January 2017

More by Peter J MCKNOULTY

• How to build a high net worth individual - Succession and transition planning paper - 07-September-2016
• Exiting your business - Next generation paper - 27-August-2015
• Transition planning paper - 21-May-2015
• What will happen to the business? paper - 28-October-2014
• Families and business in transition paper - 20-August-2013
• Restructuring the family business paper - 06-August-2013
• Shareholders' agreements - Checklist paper - 08-June-2011
• The end game – Extracting value paper - 01-August-2008
• The end game – Extracting value paper - 28-April-2008
• Tax aspects of private equity transactions paper - 13-March-2008
• Keeping it in the company paper - 26-August-2005
• Business Structures for SMEs convention paper - 04-June-2004
• Accessing the Small Business CGT Rollovers seminar paper - 10-February-2004
• Capital Gains Tax - 18-May-2001
• CGT Reform - 16-February-2001
• Small business capital gains tax concessions and the simplified tax system - 28-February-2000
• Rollovers - Small Business - 12-June-1997
• Rollovers - small business - 12-June-1997
• What is an asset - the CGT fundamentals in perspective - 01-January-1992
• Alternative structures for business and investment - 01-March-1990

Click here to expand/collapse more articles by Peter J MCKNOULTY.