ARTICLE · 15 APRIL 2016

The new small business restructure rollover provisions: ATO Commissioner significantly limits their scope

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The Act aims to make it easier for small business owners to change legal structures without affecting their tax position.

AustraliaTax

Stacey Percival

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Under the current tax laws, CGT roll-over relief is available for individuals, trustees and partners who incorporate, should a small business wish to restructure. However, other restructures have the potential to trigger a CGT event.

The Tax Laws Amendment (Small Business Restructure Roll-over) Act 2016 (Cth) (the Act) was passed by the Senate on 29 February 2016 and given assent on 8 March 2016. The Act will apply to transfers of business assets occurring on or after 1 July 2016.

The Act intends to make it easier for small business owners to change their legal structure without affecting their income tax position, acknowledging that they might find that a different legal structure may be more appropriate as the business becomes more established or the nature of the business changes over time.

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