SME demergers and capital returns
Source: Taxation In Australia Journal Article
Published Date: 1 Oct 2018
The ATO interpretation of the demerger rules has effectively put them beyond the reach of the vast majority of SME companies. This raises the questions: do the new small business roll-over rules (SBRR) provide an alternative means of achieving a similar outcome? Or of undertaking other share capital dealings in a more flexible manner than provided for by Div 16K of the Income Tax Assessment Act 1936? This article examines demerger relief, when SMEs satisfy the ATO tests, whether the SBRR allows an effective tax-free demerger and whether the safe harbour rules apply. The authors' views are that a change of view from the ATO might be forthcoming to allow SMEs to utilise the SBRR and demerger provisions as freely as they use scrip-for-scrip transactions.
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Details
- Published By: Christine Palmer, John Middleton CTA
- Published On:1 Oct 2018
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