Explanatory Memorandum
(Circulated by authority of the Minister for Small Business and Assistant Treasurer, the Hon Kelly O'Dwyer MP)General outline and financial impact
Small business restructure roll-overs
This Bill amends the Income Tax Assessment Act 1997 to provide greater flexibility for small businesses to change their legal structure.
The amendments make it easier for small business owners to restructure by allowing them to defer gains or losses that would otherwise be made from transferring business assets from one entity to another as part of a genuine restructure.
The new small business roll-over is in addition to roll-overs currently available where an individual, trustee or partner transfers assets to, or creates assets in, a company in the course of incorporating their business.
Date of effect: The amendments apply to:
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- transfers of depreciating assets, where the balancing adjustment event arising from the transfer occurs on or after 1 July 2016;
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- transfers of trading stock or revenue assets, where the transfer occurs on or after 1 July 2016; and
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- transfers of capital gains tax (CGT) assets, where the CGT event arising from the transfer occurs on or after 1 July 2016.
Proposal announced: This measure was announced on 12 May 2015 in the 2015-16 Budget.
Financial impact: The measure has the following revenue implications over the forward estimates:
| 2015-16 | 2016-17 | 2017-18 | 2018-19 |
| 0.0 | 0.0 | -$20.0m | -$20.0m |
Human rights implications: This Schedule does not raise any human rights issue. See Statement of Compatibility with Human Rights - Chapter 2, paragraphs 2.1 to 2.6.
Compliance cost impact: This measure is will result in a reduction in average annual regulatory compliance costs of $0.76 million.