From 1 July 2016 Small Businesses will be able to change their structure, i.e., move from a company to a trust without incurring a tax liability.

The business that changes their structure should only contain active assets; trading stock; revenue assets; and depreciating assets.

According to the Australian Taxation Office (ATO) to be eligible for the rollover, the following needs to be adhered to:
•    all parties to the transaction choose to apply the roll-over
•    there is no change to the ultimate economic ownership
•    the transfer is part of a genuine restructure
•    assets transferred are eligible assets
•    all parties meet the residency requirement.

The rollover is not available to an exempt entity or a superannuation fund.

Please refer:

http://treasury.gov.au/ConsultationsandReviews/Consultations/2015/Small-Business-restructure-rollover
http://www.austlii.edu.au/au/legis/cth/bill_em/tlabrrb2016622/memo_0.html

If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email  admin@mcnamaraandco.com

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