As of July 1st 2016 the Government has provided relief to small businesses that restructure. As we noted previously in our newsletter, the tax law changes provide an optional rollover for small business owners who change the legal structure of their business on the transfer of business assets from one entity to another. The effect of the rollover is that the tax cost of the transferred assets is rolled over from the transferor to the transferee.
This optional rollover is in addition to existing rollovers available where an individual, trustee or partner transfers assets to, or creates assets in, a company in the course of incorporating their business. The roll over concession applies to depreciating assets, trading stock, revenue assets and CGT assets.
It is important to know that while you can transfer active assets without tax liability there are still implications in respect to tax and future disposal of the asset. Please speak with your accountant to get a full grasp of this relief package, and to discuss eligibility.
