A Bill proposing a new roll-over for small business restructures has been introduced into parliament. The Tax Laws Amendment (Small Business Restructure Roll-over) Bill 2016 introduces a roll-over to 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 measure is proposed to take effect from Friday 1 July 2016.
The Bill introduces a new Subdiv 328-G into ITAA 1997 to provide an optional roll-over where a small business entity transfers an active asset of the business to another small business entity as part of a genuine business restructure, without changing the ultimate economic ownership of the asset.
The roll-over may also be available for assets that are used by the small business entity but held by an entity connected with the small business entity, an entity for which the small business entity is an affiliate or, if the small business entity is a partnership, a partner of that partnership. This ensures that partners and other passive entities within a small business structure that are not themselves small business entities (because they do not carry on business) can access the roll-over.