Generally if you wish to change your business structure, say from a partnership to a company or trust, you must consider whether such restructure or transfer will involve a payment of capital gains tax, stamp duty and/or GST.
As a result of those taxes, many restructures do not take place and businesses operate with structures which are less than ideal for their circumstances.
A welcome Budget announcement is the proposed relief for small businesses who wish to restructure from the payment of capital gains tax.
The concession recognises that in the initial stages of a business, business owners often do not know whether their business will be successful and do not have the resources to spend on obtaining expert advice as to how their business ought to be best structured now and in the future.
You should be aware however that whilst the Budget proposal permits small businesses to restructure without incurring the cost of capital gains tax, the effects other taxes such as stamp duty and GST still need to be considered.
As always, with Budget announcements, the detail remains to be seen.
In a similar vein, the Budget also contained an announcement that small businesses that do seek professional advice when establishing their small business, will be entitled to claim an immediate deduction for professional expenses such as for legal and accounting advice.
At Everingham Solomons we have the expertise to assist you with all of your business needs including structuring and restructuring of your business because Helping You is Our Business.
Click here for more information on Terry Robinson