From 1 July 2016 onwards, if you restructure your business from one entity to another, you may be able to apply for the small business restructure rollover relief.
The gains and losses, which for example arise from the transfer of CGT assets, trading stocks, revenue and depreciating assets as part of the restructure, will not give rise to income tax liability. This relief is only applicable to a small business entity which undertakes a genuine restructure.
Restructuring is relevant in various situations and has multiple for small business owners, here are some examples:
You may be operating your business in a partnership structure and wanting to change to a unit trust structure to better protect your assets from creditors.
You may be operating your business in a family trust structure and wanting to bring in new partners to expand your business. You can consider to rollover your business into a company/unit trust so that you can issue new shares/units to the new owner.
You may have started your business in a simple structure and now your business has grown in size and you want to split your income with other family members via a discretionary trust.
If you feel would like to confirm whether you are:
1. A small business by ATO definition, and
2. could benefit from a restructure
We can assist you, please contact Phillip Browne or Adrian Ma should you wish to discuss this matter.