Every business must deal with Australia’s complex tax system. At LegalVision, we have assisted numerous businesses and startups with critical tax issues.
Our tax law specialists provide advice on:
initial tax structuring;
restructuring (including capital gains tax (CGT) rollovers or flip-ups);
business exits (including CGT discounts and small business CGT concessions);
foreign companies expanding into Australia;
employee share plans;
early stage innovation company tax advice;
state taxes, including payroll, duties and land tax;
ATO objections and reviews;
income tax, GST and duty issues for property developers;
estate planning; and
investment structuring with self-managed superannuation funds.
Whether you operate in the startup, SME, investment or property development sector, our team has the experience and the expertise to help you navigate your way through the Australian tax system in a cost-effective manner.
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5 Things You Need to Know About TAX
1Getting the right tax structure from the outset for your particular circumstances is absolutely essential. Otherwise, you may be paying more tax than you should and may even have to pay additional tax to restructure.
2If you do not get your tax structure right from the outset, you may have restructuring options such as capital gains tax rollovers, small business restructure rollover relief or the small business capital gains tax concessions. However, these have specific requirements and whether you are eligible depends on your particular circumstances. There are no guarantees that you will qualify for relief.
3Founders often hold equal equity with the intention of contributing equally to the business. However, this does not always eventuate. It is easier to set up an option arrangement on ‘Day 1’ than it is to try and fix the cap table via transfers, share buy-backs or bonus issues at a later date, after the business has gained value. All these can trigger extra tax payments.
4When selling your business, whether you sell shares or assets can make an important difference to your after-tax returns. A share sale could result in half as much tax payable compared to an underlying asset sale. This is because the share sale may be eligible for the 50% capital gains tax discount. In contrast, an underlying asset sale will generally be taxed at the corporate tax rate. Shareholders will also have to pay top-up tax on the subsequent distribution of dividends representing that gain.
5In a business sale, you should also confirm whether you are eligible for one or more of the small business capital gains tax concessions to reduce or even eliminate any capital gains on the disposal of equity interests or underlying assets.