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Small business restructure roll-over – opportunities and traps

Published on 01 Apr 16 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

As part of the 2015-16 Budget, the government committed to providing greater flexibility for small businesses when changing their legal structure. To this end, the Tax Laws Amendment (Small Business Restructure Roll-over) Act 2016 was enacted to enable a new small business restructure roll-over (SBR roll-over) that allows small businesses whose aggregate annual turnover is less than $2m to restructure their business asset holdings without income tax and CGT liabilities. In light of the upcoming 1 July 2016 commencement date, this article examines the opportunities and traps of the new SBR roll-over, how the roll-over works, the conditions that must be satisfied to claim the roll-over, the “genuine restructure” and “ultimate economic ownership” requirements, and anti-avoidance provisions that need to be taken into account when using the roll-over.

The article also provides examples where the roll-over might be appropriate, and considers stamp duty and GST issues, and the exemptions or concessions that may be available.

Author profiles

Mark West CTA
Photo of author, Mark WEST Mark is a principal and founder at West Garbutt. Qualified as a lawyer, chartered accountant and chartered tax adviser, Mark provides advice across the spectrum of taxes. He has experience in income tax, capital gains tax, goods and services tax, fringe benefits tax, payroll tax and land tax. Mark assists with all legal matters involving taxation law, including making applications for private, class or product rulings from the ATO. He assists with tax audits and with related settlement negotiations with the ATO and State revenue authorities. He also provides tax advice on restructures, mergers and acquisitions, and on debt and equity fundraisings. He has acted for clients in tax cases before the Administrative Appeals Tribunal and the Full Federal Court. Mark conducts tax due diligence reviews, prudential reviews (i.e. prior to ATO or State revenue authority audit) of taxation exposures and gives opinions on uncertain or ‘reportable’ tax positions. Mark acts for high wealth individuals, for private groups and for listed company groups across sectors including engineering, investment funds, information technology and property. He has a number of clients in the retirement living field and is a recognised expert on taxation issues in that industry. He also advises on taxation matters for the non-profit sector, including private ancillary foundations. Mark regularly conducts training and presentations on taxation matters for accounting and legal firms as well as for professional and industry bodies. Marks expertise has been recognised by his peers for many years. In recent years Mark been listed as a leading tax lawyer in Queensland by Doyles Guide for 2017 and 2018. Mark has also been recognised by his peers for inclusion in the The Best Lawyers™ in Australia since 2013 for Tax Law, Retirement Villages and Senior Living Law. - Current at 19 September 2019
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Dung Lam CTA
Dung Lam, CTA, is a Special Counsel at Coleman Greig Lawyers with more than 20 years’ experience in advising on a wide variety of taxes including income tax, capital gains tax, GST and state taxes such as duty, payroll tax and land tax. Dung also has extensive experience advising on taxation trusts, superannuation issues in the self-managed superannuation funds arena and tax issues related to estate planning. Dung is a Chartered Tax Adviser, full member of the Society of Trusts and Estate Practitioners, an accredited Specialist in Business and Personal Tax with the NSW Law Society, a member of the Business Law Section Taxation Committee of the Law Council of Australia and a member of the NSW Law Society Liaison Committee with the Revenue NSW. Dung advises a broad range of clients ranging from corporates, small to medium enterprises, high net worth individuals, professional firms, accountants, financial planners and their clients. - Current at 31 July 2020
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