Newsletter; Business restructuring opportunity (CGT relief and stamp duty abolished) & Motor vehicle deduction changes
Business restructuring opportunity (CGT relief and stamp duty abolished)
Legislation was passed last month so that from 1 July 2016 small businesses will be able to change their legal structure without incurring any capital gains tax liability for certain transfers (this applies when transferring active assets that are CGT assets, trading stock, revenue assets and depreciating assets). The Government of South Australia also abolished stamp duty on private company share transfers in the last state budget (18 June 2015) so from July 1, there may be no Government costs to restructure.
There may be commercial benefits to changing your business structure so you should review your situation. Anyone who has a private company with individuals holding the shares should consider transferring them to a family trust (the family trust is eligible where the family group includes the individual who has ultimate economic ownership before any asset transfer).
It’s also worth noting that as a part of the Mid-Year Budget Review, the Government of South Australia brought forward the first one-third reduction to stamp duty on non-residential (commercial) property to 7 December 2015 (it was previously scheduled for 1 July 2016) with the second one-third reduction due on 1 July 2017 then full removal on 1 July 2018.
Motor vehicle deduction changes
From 1 July 2015, the motor vehicle expense claim methods were modified so that:
- The ‘12% original value’ and ‘one-third of actual expenses’ methods were removed;
- The ‘cents per kilometre’ method rate will be set at $0.66 per kilometre for all vehicles (previously $0.65, $0.76 or $0.77 depending on engine size).
It may now be worth keeping a log book for twelve weeks and switching to the log book method: https://www.ato.gov.au/Business/Income-and-deductions-for-business/Business-travel-expenses/Motor-vehicle-expenses/Calculating-your-deduction/Keeping-a-logbook/
