Most structures were set up for a smaller version of the business. The sole trader who should have been a company two years ago. The single company that now holds retained earnings, the family home’s deposit and every contract risk the business carries. The group of three operating entities that a buyer’s lawyer is about to read line by line.
The tax law provides specific rollovers that let a business move between structures without crystallising capital gains, provided the facts fit and the steps happen in the right order. Steps done out of order are the most common cause of a failed rollover we see. The work is choosing the right provision, confirming the facts support it, and sequencing the legal, lender, state revenue and tax filings so the relief actually applies.
This is advisory work with a compliance tail. The plan is written, the rollover relied on is named, and the file is built so that whoever reads it next, a buyer, a bank or the ATO, can follow the reasoning.
What’s included
From the structure you have to the one you need, in the right order.
A written plan, a named rollover, and the execution sequenced.
Current-state map
The structure as it actually is, from the ASIC registers, trust deeds, loan accounts and the ledger, not as the old engagement letter describes it.
Target-state design
Where the structure needs to be in three to five years: operations, assets, holding entity, family trust, and who owns what on exit.
Rollover analysis
Subdivisions 122-A, 328-G and 124-N and Division 615 tested against the facts, with the one the facts support chosen and the conditions documented. Where rollover relief is available it may defer or remove an immediate tax cost; we test that before recommending the steps.
Division 7A and UPE clean-up
Historical loans and unpaid present entitlements brought onto complying terms or dealt with as part of the restructure, so they do not travel into the new structure.
Family trust election and section 100A
Elections confirmed or made before the first distribution, and the trust's historic distribution position read honestly.
Sequenced execution
Legal documents, lender consents, state duty filings and tax elections coordinated in the order the rollover provisions require, with a closing checklist.
Who it’s for
Businesses that have outgrown their structure.
Founders moving from sole trader or partnership into a company and trust. Operating companies that need a holding company above them before a capital raise, a sale or an asset-protection event. Family groups with entities that no longer match how the business is run.
It is not a fit for a restructure driven only by a tax outcome the law does not support. If the only reason is to avoid tax that is properly payable, we will say so on the first call.
How we approach it
Map. Design. Sequence. Execute.
- 01
Map and design
Current state and target state documented, with the commercial reasons for the change written down, because they matter to the rollover and to the duty position.
- 02
Choose the rollover
The provision the facts support, its conditions, and what has to be true on the day of each step, with the state duty consequences modelled alongside.
- 03
Execute in order
Lawyers, lenders and registries coordinated step by step, with the tax elections lodged on time and a file that shows the sequence was followed.
From our work
Everything he owned, on the line every working day
Based on real jobs and typical situations. Names, figures and details changed.
The situation
An agricultural contractor had built up a harvesting and spraying business over a decade, still trading as a sole trader. Everything sat in his own name: the family home, the headers, tractors and sprayers, and the finance on them. As a sole trader there is no legal line between the business and the person. A serious accident in a paddock, a spray drift claim, a large bad debt from a grower or an employee claim could have reached everything he and his family owned.
He knew he needed a company. Before setting one up, he wanted the old file checked properly, so he wasn't carrying old problems into the new structure.
What we did first
- Set up a trading company with the right tax registrations from day one, and planned the changeover date and the transfer of contracts and staff.
- Reviewed every line of the sole trader's books, and tested every activity statement label by label against them.
- Found fuel tax credits on off-road diesel he had been entitled to all along and never claimed, with one quarter only weeks from the end of the period in which it could still be claimed.
- Found GST claimed twice on financed machinery: once when each machine was bought and again on the repayments. We recommended he raise it with the ATO himself through a voluntary disclosure, rather than wait for the ATO to find it, because that usually reduces the penalty substantially.
- Identified that the seasonal crew he paid weekly were, in substance, employees. They are moving onto payroll from the changeover, with tax, super and Single Touch Payroll handled properly, and we are sitting in on the first pay runs.
The next stage: separating what he owns from what he risks
Moving into one company is only the first step. A trading company that owns the machines and employs the crew still holds everything in one place, so a single large claim against it could take the lot. The plan has two more entities.
- A plant hire company owns the headers, tractors and sprayers and hires them to the trading company under a written agreement at market rates. Run properly, the machines then belong to a different company if the trading company is sued or fails.
- A labour hire company employs the crew and supplies them to the trading company for a fee. Wages, super, workers compensation and employment claims sit with the employing company rather than the one that signs the contracts with growers and carries the risk on each job, and payroll and super have one clean place to be done right every week.
- The trading company owns as little as possible. It wins the work, signs the contracts and carries the risk of each job, and profits are paid out regularly rather than left to build up in it.
Why it mattered
Instead of everything being exposed to every risk, each part of the business is being set up to carry only its own. The new structure starts with clean books, a properly run payroll and no inherited problems. The review also found money he was owed and put him in a position to deal with an exposure on his own terms, before anyone came asking. The whole picture was set out in a single plain-English report: what had been lodged, what was right, what wasn't, and what to do first.
Technical note
A sole trader has unlimited personal liability for business debts and claims. A group of companies only protects assets if it is run properly: the plant hire and labour hire arrangements need written agreements, market-rate fees that are actually invoiced and paid, and the plant hire company's interest registered on the PPSR, without which hired plant can be lost to the trading company's liquidator. Moving financed plant needs the financier's consent. Related companies are grouped for payroll tax, so separating them saves no payroll tax, and labour hire licensing applies in some states. Personal guarantees and director penalty rules can still reach the director personally. Asset transfers may qualify for the small business restructure roll-over, and a worker paid for their own labour can be an employee for super purposes even with an ABN.
FAQ
Common questions.
If yours isn’t here, ask it on the first call. Thirty minutes, no fee.
Will the restructure trigger capital gains tax?
Not if a rollover applies and its conditions are met. Each rollover has its own conditions on who the parties are, what is transferred and what is received. We confirm the conditions before anything is signed.
What about stamp duty?
State transfer duty is separate from income tax and does not follow the CGT rollovers. Some states offer concessions for genuine restructures; others do not. We model the duty position for the states involved as part of the plan.
How long does a restructure take?
Simple sole-trader-to-company rollovers can complete in a few weeks. Multi-entity restructures with lenders and property involved typically run eight to twelve weeks because the steps have to happen in order.
Can you fix a restructure that was done badly?
Often there is something to be done. Paperwork cannot change what actually happened, so the first step is a candid review of the facts; from there we check whether the relief was in fact available and what correction options exist, including with the ATO where the position needs to be put right.
How do you charge?
A fixed fee for the plan, agreed after the scope call, and a fixed fee for execution once the steps are known. Legal and registry costs are disclosed separately.
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