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Restructures & CGT Rollovers

This Knowledge Shop IQ module explores the essential information you need to know to reduce risk by preempting problems that might occur during a restructure and maximising opportunities by utilising the forms of relief and concessions available to eliminate or defer tax.

 

There are many reasons why clients might want to restructure their business or move assets between different entities. This will often trigger one or more taxing events and could trigger a significant tax liability which can be a problem if no fresh capital or funds are being injected as part of this process. However, the tax system does contain a number of forms of rollover relief and other concessions that can potentially be used to eliminate, reduce or defer the tax that would otherwise be triggered.

 

See the IQ module outline. 

 

 

The Restructures & CGT Rollovers Module is part of the Principal & Manager I Program of 10 modules specifically designed to manage the training needs of your Intermediate team members across a year.

 

More on the Principal & Manager Program

Partner Manager Knowledge Shop IQLevel
Principal/ Manager

Length
81.68 minutes + quiz questions

Access
24/7 for 12 months

Resources
Downloadable reference notes

PD Hours
1.6 PD Hours

Introduction & Outline (1:14) 

Tax issues on restructuring (1:05)

  • Interaction of the various taxes on restructures


CGT assets (5:28)

  • Market value substitution rules

  • When the rules apply

  • Special rules for pre-CGT assets

  • The impact of Division 149

  • Accessing and applying the CGT discount


Rollover relief (3:17)

  • Implications of applying relief

  • Cost base issues

  • Change in economic ownership


Small business restructures (3:16)

  • When it applies and why you would apply it

  • Conditions for relief


Genuine restructures (5:13)

  • What is a genuine restructure

  • Acceptable reasons and LCR 2016/3

  • What is not a genuine restructure

  • The safe harbour rules

  • The potential of Part IVA


Economic ownership (1:46)

  • Tracing economic ownership    

  • Managing discretionary trusts 

    • The safe harbour
    • Family trust elections

Restructure implications (2:58)

  • Tax treatment of gains and losses

  • Cost base implications

  • Implications of restructures to depreciating assets, CGT discount, 15 year exemption, pre CGT assets, trading stock, capital losses

Transfer of assets to a company (1:32)

  • Restructure walk through

  • Application of Division 122

  • Main conditions to access relief and considerations

  • Potential drawbacks


Interposed holding company (4:53)

  • Application of Division 615

  • Main conditions to access relief and considerations

  • When it cannot be used

  • When the restructure is useful


Fixed trust to company (2:46)

  • Application of Subdivision 124-N

  • Main conditions to access relief and considerations

  • When the restructure is useful


Scrip for scrip rollover (3:34)

  • Application of Subdivision 124-M

  • Main conditions to access relief and considerations

  • Potential issues with applying scrip for scrip rollover


Demergers (4:33)

  • Application of Division 125

  • Main conditions to access relief and considerations

  • Managing dividends

  • Application of the anti-avoidance rules

Small business CGT concessions (11:53)

  • Application of Division 152

  • Practical issues and compliance

  • When applying the concessions is effective

  • Implications to the cost base

  • Basic conditions for relief - practical application

  • Applying the small business CGT concessions


Depreciating assets (3:11)

  • Treatment of depreciating assets during a restructure

  • When relief applies

  • How the rules apply to different entity types


Trading stock (2:01)

  • Tax treatment of losses during a restructure

  • The exceptions

  • The loss recoupment rules

  • Options for future use of losses


Losses (2:01)

  • Treatment of trading stock during a restructure

  • When relief applies

GST (3:15)

  • GST treatment of interests during a restructure

  • Special rules for associates

  • Application of the going concern rules  

Duty (1:59)

  • What accountants are responsible for

  • Corporate reconstruction relief provisions

Managing change (2:53)

  • Advising on a restructure

  • Managing the process with stakeholders

  • Expectations beyond tax     

        

Quiz | Restructure options for a property development (1:44)

  • Quiz James

  • Quiz Answer James

Quiz | Restructuring partnerships (2:28)

  • Quiz Betty & Bill

  • Quiz Answer Betty & Bill

Quiz | Company share acquisition from a trust (2:00)

  • Quiz Henry

  • Quiz Answer Henry

Quiz | Rollover relief for a unit trust (1:55)

  • Quiz Alice

  • Quiz Answer Alice

Quiz | Sole trader restructure (1:29)

  • Quiz Alice

  • Quiz Answer Alice

 

Reference notes are provided with this module.

  

IQ Presenter

Michael Carruthers

 

Tax Director, Knowledge Shop

Michael Carruthers Director Knowledge Shop

Michael oversees the development of the tax team for Knowledge Shop and Hayes Knight in Sydney and is head of the Hayes Knight group’s national tax committee. 

 

Michael has a knack for seeing through the complexity and helping practitioners work through highly technical issues with certainty and accuracy. 

 

He is a member of the advisory panel for the Board of Taxation and was an expert panel member for the Board of Taxation’s review of tax impediments facing small business.

 

Linked In

AAA_SEAL_2016_Winners_THOUGHT_LEADER_OF_THE_YEAR.png

Michael was the Thought Leader of the Year at the 2016 Accounting Awards