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Edited version of private advice
Authorisation Number: 1051857810828
Date of advice: 26 June 2021
Ruling
Subject: Small business restructure rollover
Question
Does the proposed transfer of land from individual to the new discretionary trust(s) qualify for relief under subdivision 328-G of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. The transfer of land from the individual taxpayer to the new discretionary trust(s) qualifies for relief under subdivision 328-G of the ITAA 1997 as the relevant requirements will be satisfied for the proposed transaction. It is considered that the transfer of assets is part of a genuine restructure of an ongoing business.
This ruling applies for the following period periods:
Period ending 30 June 20XX
Period ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
You do not carry on a business individually.
You are an Australian resident.
You own two parcels of land.
Both parcels of land are owned solely by you.
Both parcels of land are used in small businesses connected with you.
The land will transferred to a new discretionary trust(s) with a corporate trustee(s).
You will be the appointer of the new discretionary trust(s).
Each new discretionary trust will have a family trust election in place with you as the test individual.
You and your family will be the beneficiaries of the new discretionary trust(s).
The new discretionary trust will be an Australian resident trust.
You will be the sole shareholder of the new trustee company(ies).
The land will continue to be used for the same small businesses.
The aggregated turnover of the entities is below $XXX.
The purpose of applying the restructure rollover is to:
• Enables additional options with financiers to be negotiated over longer terms to assist in growth of the business.
• The ownership of the land will then reflect a structure likely to have been adopted had the taxpayers obtained appropriate professional advice when acquiring each parcel of land.
• Provide additional asset protection to the taxpayer who's land is integral to the running of each companies business.
Both the transferors and each transferee will choose to apply the roll-over in relation to the assets transferred under these transactions.
Relevant legislative provisions
Subdivision 328-G of the Income Tax Assessment Act 1997
Section 328-125 of the Income Tax Assessment Act 1997
Section 152-10 of the Income Tax Assessment Act 1997
Section 152-40 of the Income Tax Assessment Act 1997