Foundations of Taxation Law

Business and entity restructures are common in the commercial world. To ensure the tax law does not impede or frustrate such activity, special roll-over and other forms of tax relief are available. Without this relief, these restructures might otherwise give rise to a number of adverse CGT and other consequences for the parties involved. This chapter examines the roll-over relief available for: small business restructures, scrip for scrip takeovers, demergers, disposals of assets to, and creation of assets in, wholly owned companies, exchanges of shares or units in the same company or unit trust, and exchanges of shares or units for shares in an interposed company. In 2019, the Assistant Treasurer announced the Board of Taxation would review roll-over provisions. In February 2020, the Board published a Consultation Guide containing an overview of the provisions and policy considerations evaluating and improving their framework. In December 2020, it published Review of CGT Roll-Overs, seeking submissions to rationalise existing roll-overs dealing with common business restructuring transactions with a single ‘general restructure roll-over’. At the time of writing, the Albanese Government has not indicated whether it plans to make any changes to the rules.