Are you restructuring?

Have you restructured your business recently or are you looking at restructuring in the near future?

Normally, when you sell a business, you would have to pay income tax because your business has sold or transferred its assets.

When you change the structure of your business, ownership of the assets doesn't really change, so we have a rollover which allows you to transfer assets as part of a restructure without having to pay income tax on that transfer.

However, there were still other tax consequences that applied when transferring depreciating assets as part of a restructure. For example, a company transferring a depreciating asset (such as a motor vehicle or plant and equipment) to a sole trader could create a dividend.

This did not seem to be how the law was meant to apply, so we have recently used the Commissioner's remedial power to fix this.

As a result, there will no longer be any income tax consequences when your restructure involves the transfers of depreciating assets.

This will automatically apply - there is nothing you need to do differently in the event of a restructure.

Remember, registered tax and BAS agents can help you with your tax.

https://www.ato.gov.au/Newsroom/smallbusiness/General/Are-you-restructuring-/