A Bill currently before Parliament will enable Australian small businesses to change their legal structure without attracting a Capital Gains Tax (CGT) liability at that time.
• Provides greater flexibility for small business owners to change the legal structure of their business by allowing them to defer gains or losses that would otherwise be realised when business assets are transferred from one entity to another.
• Provides small businesses with a new roll-over for gains and losses arising from the transfer of active assets that are CGT assets, trading stock, revenue assets and/or depreciating assets between entities as part of a genuine restructure of an ongoing business.
• Applies to transfers that do not result in a change in the ultimate economic ownership of the assets.
• Is in addition to roll-overs currently available where an individual, trustee, or partner in a partnership transfers assets to, or creates assets in, a company in the course of incorporating their business.
• Extends the relief to include transfer of trading stock, revenue assets, and depreciating assets.
These changes are expected to apply to transfers occurring on or after 1 July 2016.