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 plan the transition from business or full-time work to the next phase of their lives. Its programs help to develop work-life balance at all stages of a career. TPA’s belief is that everyone is entitled to a happy and healthy life both during and after full-time work. Peter has degrees in Commerce and Law (with Honours) from the University of Queensland. - Current at 12 July 2018

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