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| Subject: Consolidation planners can be winners after July 1st 2002 | |
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Author: anonymous |
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Date Posted: 02:32:56 10/08/02 Tue http://www.stockhouse.com.au/bullboards/viewmessage.asp?no=5300111%20&tableid=1 --------------------------------------------------------------------- http://www.deloitte.com.au/home.aspPage=/internet/items/item.asp&id=5667 --------------------------------------------------------------------- Consolidation: Planners can be Winners --------------------------------------------------------------------- Australia's new consolidation regime offers potential rewards for businesses that plan carefully. --------------------------------------------------------------------- Consolidated groups can look forward to an overall reduction in tax expense once the regime comes into force on 1 July 2002. The regime will enhance the commercial flexibility of all groups by removing the potential for the duplication of gains on intra group transactions. Consolidation will also result in the removal of dividend traps that can arise under the present corporate tax rules. The new regime should lead to a long term reduction in compliance costs. --------------------------------------------------------------------- We do have some reservations. In December 2000, Deloitte identified a number of complexities and arbitrary measures in an earlier draft of the regime. Many of these survive in the new draft, despite extensive consultation and a 12 month delay in the date the regime comes into force. There are still significant gaps in the proposed legislation and a new concept called the "Clean Slate" rules is somewhat unclear. --------------------------------------------------------------------- The anticipated benefits of the regime are not uniform. Some taxpayers will find that consolidation will not work for them. For example, some groups would take longer to recoup their losses under the new rules. --------------------------------------------------------------------- Each business will have to consider a number of factors before deciding whether to consolidate. These include individual circumstances and how much effort taxpayers are willing to put into planning, implementation and management of entry to the new regime. --------------------------------------------------------------------- Once the new rules are bedded down, we hope the GST grouping arrangements will be brought into alignment and a consistent regime is introduced for FBT and PAYG withholding. --------------------------------------------------------------------- For further information, please contact: --------------------------------------------------------------------- Garry Bourke Partner, Deloitte Tax Services, Melbourne Tel:+61 3 9208 7143 gbourke@deloitte.com.au --------------------------------------------------------------------- Jane Coomer Partner, Deloitte Tax Services, Sydney Tel: +61 2 9322 7367 jcoomer@deloitte.com.au [ Next Thread | Previous Thread | Next Message | Previous Message ] |