In the formation of corporate groups, consideration should be made of the group’s tax structure to maximise its potential. Tax relief and incentives are available for transactions made by a corporate group.

CGT rollover relief

Where a taxpayer disposes of an asset, the disposition will be subject to capital gains tax (CGT) unless one of the available exemptions applies. CGT might apply to the transfer of an existing business to a corporate structure. CGT rollovers allow for any capital gain to be deferred, or in some cases, disregarded. There are a number of rollovers relevant to restructuring a corporate group including scrip-for-scrip rollover.

See CGT rollover relief.

Stamp duties restructure relief

All jurisdictions have statutory provisions which allow for relief from stamp duty on a corporate restructure. Eligibility requirements apply and, the purpose must be to accommodate the required structural changes within the group and note for the purpose of avoiding any tax liability. Some jurisdictions also contain relief for corporate consolidation transactions which involves the interposition of an entity between a company and its existing shareholders.

See Stamp duties restructure relief.

GST groups

The formation of a goods and services tax (GST) group for a corporate structure has the advantage of having certain intragroup transactions being disregarded for GST purposes.

See GST Groups.

PAYG instalments

Particular rules apply for pay as you go (PAYG) instalments of tax consolidated corporate groups. Taxpayers who meet certain threshold requirements in relation to business and investment income are required to submit income tax on an instalment basis. Those instalments will generally be due either quarterly or half yearly.

See PAYG instalments.

Tax consolidation

Tax consolidation allows eligible wholly owned groups to be treated as a single entity for income tax purposes. The benefits of tax consolidation include that a single tax return need only be lodged in respect of all entities in the group, and assets can be transferred between entities within the group without CGT consequences.

See Tax consolidation.

Research and development tax incentives

An incentive is available for research and development expenses of companies. The incentive comes in the form of a tax offset. There are eligibility requirements as to the type of company and the activities that may be undertaken.

See Research and development tax incentive.