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New law drops tax hurdle for small business restructure

Sarah Stowe

The Tax Laws Amendment (Small Business Restructure Rollover) Bill has been passed in Federal Parliament, which means that franchisees and other small businesses can now restructure their firms without the obstacle of paying capital gains tax, effective July 1 2016. 

According to a report by Inside Retail, in order to be eligible for the rollover, each party to the transfer must be either:

  • a small business entity with $2m or more in turnover for the income year of the transfer;
  • an entity that has an “affiliate” that is a small business entity for that income year;
  • “connected” with an entity that is a small business entity for that income year; or
  • a partner in a partnership that is a small business entity for that income year.

Business structures and types

Franchisees should always seek professional advice before restructuring their business as per the rollover.