Division 7A and the new small business restructure rollover – 50th WA Convention

Daniel Taborsky CTA and Alan Krawitz CTA
Celebrating its 50th anniversary in 2017, Western Australia’s State Convention returns with a packed program that features some of the most-respected tax practitioners from across the state and around the nation. 

Here we take a look at two sessions from the Convention’s dedicated SME stream:

  • A presentation by Richard Friend CTA on ‘Division 7A – dealing with the here and now'
  • A workshop by Alan Krawitz CTA and Daniel Taborsky CTA on 'The new small business restructure rollover - the opportunities'.
In their session, Alan and Daniel will use a case-study-based workshop to provide a practical application of how the provisions of the new small business restructure rollover works in practice, as well as the opportunities available.

As a director at EY Law, Alan's principal areas of practice include income tax, CGT, disputes, tax litigation, superannuation, trusts, and wills and estates. Also with EY Law, Daniel is a senior associate and has almost a decade of experience advising corporate clients with taxation and duty matters. 

The new rollover provisions enable the restructuring of a small business into a more appropriate legal structure without triggering tax liabilities.

The ATO views that have been released have a number of implications in applying the rollover, and the proposed increase in the turnover threshold to less than $10 million need to be understood by those working in this area, while there is still some uncertainty around when the restructure rollover might be used instead of the small business CGT concessions. Each of these areas will be covered.

Alan and Daniel's session will also look at the opportunities subdivision 328-G presents.

They told us that “the roll-over provisions are new and aspects of their application are uncertain for many practitioners. We’ll aim to provide insights into the practical application of the provisions and a deeper dive into some of the uncertainties.”

“We hope that, through the use of case studies, delegates will gain a practical understanding of how to apply the provisions and a better awareness of some of the uncertainties.”

Richard Friend, CTA, spent most of the first 23 years of his professional career in Brisbane in the tax practice of Andersen and then Ernst & Young. He now operates a tax consulting business through Balena Tassa Pty Ltd. With particular expertise in tax and related structuring issues for the private client market, most of Richard’s work is done by way of consulting to, and training for, accountants and lawyers around Australia who operate in these areas.

In his session, ‘Division 7A - dealing with the here and now’, Richard presents case studies that focus on several practical issues confronting practitioners in dealing with the complexities of the current Division 7A regime, and some of the common mistakes.

Richard told us: “There are still some common blind spots that can trip practitioners up when dealing with Div 7A. These include a lack of a proper understanding of the definition of an ‘associate of a shareholder’, the interposed entity rules and how to deal with trusts and UPEs. Basically, despite lots of education, there seems to still be a lot of ignorance.”

Richard’s session is designed to help practitioners deal with the existing law as it is. He’ll also expand on the issues around ‘associates’ and lending to unit trusts and partnerships, dealing with loans from trusts with UPEs, and the issues around sub-trusts and Div 7A loans created from UPEs since 2010.

Richard said his session will be practical in focus and that he has designed it to provide delegates with “a better understanding of some of the traps - and tips - in dealing with Div 7A under the current regime.”

In addition to these sessions, the dedicated SME stream of the convention features:

  • Jemma Sanderson CTA (Cooper Partners) and Hoa Wood (ATO) on ‘Superannuation – the current state of affairs post 1 July’
  • Mark Pollock CTA (BDO) on ‘Issues for private businesses conducted via trusts’
  • Corey Beat, CTA (RSM Australia) on the issues in property transactions - from a simple subdivisions through to larger scale developments.
The 50th Western Australia State Convention takes place on 17-18 August 2017 at Crown Perth, WA.

You can find out more about these sessions and the rest of the program on our website.

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