Corporate restructures involving acquisitions or disposals

Consolidation

• Structuring acquisitions, or restructuring where the economic ownership remains unchanged – including inserting a new head company
• Ensuring your allocable cost amount (ACA) calculations are accurate
• Correctly identifying the assets acquired by the group that are subject to the tax cost setting rules
• Applying the appropriate market value to the reset cost of base assets in the ACA allocation process
• Ensuring the eligibility of deductions claimed under the rights to future income and residual tax cost setting rules
• Applying the multiple entry consolidated (MEC) group rules correctly

Capital gains and losses

• Calculating the cost base of the asset joining the group

Losses

• Correctly applying the following when transferring losses from a joining entity to a head company of a consolidated group
  • modified continuity of ownership test
  • same business test rules
  • available fraction.
   
• Ensuring the available fractions for the entire group are correctly calculated
• Correctly applying the continuity of ownership and same business tests when deducting tax losses or applying net capital losses

International tax

• Whether increased value has been allocated to the Australian entity for thin capitalisation purposes
• Post-acquisition refinancing, particularly where there is evidence of debt loading or interest rates changes
• Innovative or uncommercial risk transfer arrangements

Goods and services tax (GST)

• Claims for GST credits on related acquisitions that were not made solely for a creditable purpose, where the restructure involves making (or an intention to make) input taxed financial supplies
• Changes to business structures, systems or accounting processes and the impact on correct reporting of GST obligations

Other

• Deductibility of your purchase costs
• Financing arrangements involving hybrid or innovative instruments

Capital gains and losses

• Correctly classifying the proceeds of an asset sale as revenue or capital
• Steps within corporate restructures that may result in reduction, deferral or elimination of a capital gain
• Rollovers, exemptions or concessions used to reduce or defer any capital gains
• Use of convertible notes
• Material differences between the economic and tax outcomes
• Valuations used to calculate a capital gain or capital loss
• Exiting an entity from a tax consolidated group or deconsolidating a tax consolidated group
• Disposal of taxable Australian property by non-resident organisations, including
  • real estate
  • mining rights
  • interests in an Australian entity that owns real estate and mining rights in Australia
   

Losses

• Application of the following tests when deducting tax losses or applying net capital losses
  • continuity of ownership test
  • same business test.
   

Goods and services tax (GST)

• Claims for GST credits on related acquisitions that were not made solely for a creditable purpose, where the restructure involves making (or an intention to make) input taxed financial supplies
• Changes to business structures, systems or accounting processes and the impact on correct reporting of GST obligations