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MGS Private · Corporate Consolidation & Restructure

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.

Subdivision 328-G Rollover

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

Small Business Entities — Both Sides
All parties involved in the transfer must be small business entities with aggregated annual turnover of less than $10 million. This threshold is assessed on the aggregated basis — including associated entities.
Genuine Restructure Test
The transfer must be part of a genuine restructure of an ongoing business — not a preliminary step in the disposal of the business or the extraction of value for personal use. The ATO examines subsequent conduct of the parties.
Economic Ownership Unchanged
The ultimate economic ownership of the assets must not materially change — the same person or persons must continue to bear the economic risk of the assets after the transfer.
Active Assets Only
The rollover applies only to active assets. Non-active assets transferred at the same time are excluded — gains on those assets must be recognised and managed separately.
Three-Year Integrity Rule
If the transferred assets are disposed of or economic ownership changes within three years, the rollover is reversed and the deferred gain is triggered — with interest accumulating from the original deferral date.

Considering a small business restructure?

The conditions are strict and the three-year integrity rule creates ongoing obligations. Get specialist advice before proceeding.

Still have questions?
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