Paul Dowd, Tax Counsel of Morse Group welcomes new tax laws
New tax laws will remove current impediments to restructuring of small businesses. The proposed laws were introduced to Parliament on 4 February 2016 and follow on from changes announced in the 2015/16 Budget.
"The proposed laws will allow small businesses to change their legal structure without incurring a tax liability that would otherwise apply" says Dowd. He adds "they are a welcome addition to other roll-overs that already exist and will allow small business owners the flexibility of choosing the appropriate legal structure without the negative cash flow affect of having a liability to tax arise on the restructure".
Dowd has also welcomed the Government's initiative to extend the roll-over where a party to the restructure is a family discretionary trust. Dowd says "Contrary to certain comments by various observers, family trusts play a useful role in the context of running a small business and it is pleasing to see that such legal structures are not to be excluded from access to these new roll-overs".
Dowd explains in a white paper to be published on the Morse Group website that the measures will apply to businesses that are taken to be small businesses under the current rules in the tax laws and that, generally speaking will have application where the turnover of the business is less than $2 million per annum.
"There are many businesses in regional areas such as Bathurst that will seek to move to a new legal structure to adapt to contemporary conditions without the impediment of needing to meet a tax liability that would otherwise apply. This is very good news for small business owners" says Dowd.
He further says that the legislation contains integrity rules aimed at "a minority of taxpayers and advisers (who) may try to manipulate the operation of a 'black letter' provision of the tax law to achieve an inappropriate or uneconomic tax outcome".
Dowd's synopsis of the white paper referred to above can be accessed here and he is available on 6339 9200 to provide more commentary on these proposed laws and their potential impact on local small businesses. You can also view Paul's profile here.
A PDF version of the Press Release is also available below.