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Eligibility for the small business restructure roll-over

Posted by Team AVS on 19 Jun, 2024  0 Comments

We’re checking that the small business restructure roll-over is being used correctly.

We’re concerned some wealthy groups are using the small business restructure roll-over (SBRR) for reasons other than a genuine restructure of an ongoing business.

The SBRR allows the tax-free transfer of active assets from one entity to another, but only when that transfer is part of a genuine restructure.

We’re engaging with some tax professionals and their clients to ensure the required conditions have been met, including whether a genuine restructure has occurred. Some indicators of a genuine restructure are:

  • a bona fide commercial arrangement
  • maintaining economic ownership of the business
  • continued use of the transferred assets in the business
  • a new structure that may have been adopted when establishing the business if appropriate professional advice was obtained
  • changes that facilitate growth rather than divestment
  • changes that aren’t artificial or unduly tax driven.

The SBRR also includes a safe harbor rule that provides an alternative way of meeting the requirement that a restructure is genuine.

To ensure SBRR eligibility, or to amend any errors or misuse, we have a range of resources available.

Contact us to:

  • correct a mistake
  • engage early for advice
  • apply for a private ruling to attain certainty regarding eligibility for the SBRR
  • seek a pre-lodgments compliance agreement for any commercial deal.

If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.


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