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No tax penalty when restructuring your business

Federal Parliament recently passed legislation that will allow small businesses to change the legal structure of their enterprise without incurring a capital gains tax (CGT) liability. Instead, the CGT liability can be deferred until eventual disposal.

The legislation, ‘Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016′, will apply from July 2016. It provides an optional rollover for small business owners who change the legal structure of their business when transferring assets from one entity to another.

The effect of the rollover is the tax cost of the transferred asset/s is rolled over from the transferor to the transferee, providing greater flexibility for the small business.

The rollover will apply to any gains and losses which occur from the transfer of active assets that are:

Businesses that qualify for the rollover are ongoing businesses who transfer asset(s) as part of a genuine restructure.

Whether a restructure is “genuine” is determined by the facts and circumstances of the restructure, such as:

To be eligible for the rollover, each party to the transfer must be either:

Since the new rules are rather technical in nature, obtaining professional advice may be in a small business’s best interest to ensure they can take advantage of the restructure rollover.

Posted on 8 March '16 by , under Tax.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
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  • Investment options
  • Ongoing service fees
  • Performance of the funds

Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
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  • Details of your previous fund.

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