New Small Business Restructure Rollover

The Tax Laws Amendment (Small Business Restructure Rollover) Act 2016 was officially sanctioned and came into effect on 1 July 2016. The new Small Business Restructure Rollover forms part of the Growing Jobs and Small Business package.

As a small business owner, you will be able to change the legal structure of your business, and you should not be liable for income tax when your transfer your assets from one entity to another. The new rollover is in addition to what is currently available such as where an individual, trustee or partner transfers assets to a wholly owned company.

You now will have greater flexibility to change the legal structure of your business and be allowed to defer gains or losses that would have happened when you transferred assets between entities.

The rollover can apply to gains and losses that happened as a result of the transfer of active assets. These assets are

  • Capital Gains Tax (CGT) assets,
  • trading stock,
  • revenue assets and/or
  • depreciating assets between entities as part of a genuine restructure of an active business.

Should the transfers not result in a change in the ultimate economic ownership of the assets, the Act will apply.

To use this rollover, each party to the transfer must be:

  • a small business entity, or
  • an entity that has an affiliate that is a small business entity, or
  • must be connected with an entity that is a small business entity, or
  • must be a partner in a partnership that is a small business entity.

You will be able to do a Small Business Restructure Rollover if:

  • all parties to the transaction choose to apply the rollover
  • there is no change to the ultimate economic ownership
  • the transfer is part of a genuine restructure
  • assets transferred are eligible assets
  • all parties meet the residency requirement.

The rollover is not available to an exempt entity or a complying superannuation fund.

Despite being eligible for the new rollover, a taxpayer may prefer to apply the CGT Small Business Concession to a capital gain.

This information was taken from the ATO website and is available at the following link.

For new business clients, your first 30 minute consultation is free at Omega Tax & Accounting. For more information on whether the Small Business Restructure Rollover can be done in your situation, contact us at 08 9562 0526 or email us at

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