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Re: Small business restructure rollover and GST

Newbie

Views 46

Replies 2

Good Afternoon,

If a client rollover business (Goodwill, trading stock, cars & equipments, chattel mortgages) from sole trader to company using Small Business Restructure Rollover, can the client transfer them as GST-free sale under "going concern" rule? 

If the client cannot transfer chattel mortgages, is the going concern applicable to the situation?

Thank you. 

 

1 ACCEPTED SOLUTION

Accepted Solutions

Most helpful response

ATO Community Support

Replies 0

Hi @123SL

 

Yes, potentially a business can transfer all the assets as a "going concern" provided all conditions are met.

 

If the chattel mortgages cannot be transferred, but the assets they relate to are, then potentially still yes. The business loans are not a part of what is necessary to continue the operation of the business for the purchaser.

 

You can read about selling a going concern on our website.

2 REPLIES 2

Devotee Registered Tax Practitioner

Replies 1

If a client rollover business (Goodwill, trading stock, cars & equipments, chattel mortgages) from sole trader to company using Small Business Restructure Rollover, can the client transfer them as GST-free sale under "going concern" rule? 

 

Yes, in theory  -  as long as "all things necessary"  are supplied.

 

If the client cannot transfer chattel mortgages, is the going concern applicable to the situation?

 

Probably not, if you cannot transfer the assets.

Most helpful response

ATO Community Support

Replies 0

Hi @123SL

 

Yes, potentially a business can transfer all the assets as a "going concern" provided all conditions are met.

 

If the chattel mortgages cannot be transferred, but the assets they relate to are, then potentially still yes. The business loans are not a part of what is necessary to continue the operation of the business for the purchaser.

 

You can read about selling a going concern on our website.