4th Quarter 2021

We’re often asked the best way to sell a business. There are two key components at play in the sale of a business; structuring the transaction and positioning the business to the market. Both elements are important and can significantly impact your result.

The Australian Taxation Office (ATO) has provided some guidance on how it would approach situations where private companies have made loans to related SMSFs and where the loan is subject to a limited recourse borrowing arrangement and also a complying Division 7A loan agreement.

Some brief updated guidance on the operation of the share capital account tainting rules has been released on the Australian Taxation Office (ATO) website. The rules are aimed at preventing companies from transferring profits into their share capital account and distributing those amounts to shareholders disguised as non-assessable capital distributions.

One of the easiest ways for the Australian Taxation Office (ATO) to pick up on problem areas is where there are mismatches in the information provided to the ATO. Common problem areas include:

ENTERTAINMENT DEDUCTIONS WITH NO CORRESPONDING FRINGE BENEFIT