Small Business Restructures
The small business restructure rollover (Subdivision 328-G) provides flexibility for small businesses to change their legal structure without triggering significant tax liability — but strict eligibility conditions apply and must all be satisfied.
Changing structure
without triggering tax
The small business restructure rollover (Subdivision 328-G of the ITAA 1997) allows eligible small business entities to transfer active assets from one business structure to another without triggering an immediate tax liability. The rollover defers — but does not permanently eliminate — the capital gain.
- Aggregated annual turnover of all parties must be under $10 million
- Assets transferred must be active assets used in a business
- The transaction must be a genuine restructure of an ongoing business — not a preliminary step to a sale
- The ultimate economic ownership must not materially change as a result of the transfer
- Applicable to transfers from/to individuals, companies, trusts and partnerships
- Stamp duty consequences are separate — each State has its own rules
- Three-year integrity rule — disposal within three years reverses the rollover
State duty consequences are separate. The small business restructure rollover provides CGT rollover relief only — it does not create a stamp duty exemption. Each State has its own rules about whether duty is payable on transferred assets. Specific duty advice is required for each jurisdiction involved.
Key Eligibility Conditions
All must be satisfied for the rollover to apply
Considering a small business restructure?
The conditions are strict and the three-year integrity rule creates ongoing obligations. Get specialist advice before proceeding.