Insurance broking businesses are set to benefit from new legislation outlining changes to tax requirements when changing ownership.
Parliament passed the Small Business Restructure Roll-over Bill on Monday, which allows small businesses to amend their legal structure without concurrently attracting a capital gains tax (CGT) liability.
“This is important legislation from the Federal Government. NIBA supported this legislation during consultations in late 2015,” NIBA CEO Dallas Booth says.
“Very often, the legal ownership of an insurance broking business develops over time for valid historical reasons, but the ownership structure might not suit a potential purchaser who wants to acquire the business.”
Booth says insurance broking business owners will now be able to change the ownership structure of their business without being hit by a CGT liability.
“This will allow them to restructure in a way that makes the business attractive to potential purchasers, without having to worry about tax prior to the sale,” Booth says.
Minister for Small Business and Assistant Treasurer Kelly O’Dwyer adds that the new legislation minimises complexity and risk.
“The government is reducing the burden of unnecessary red-tape on small businesses,” O’Dwyer says.
“The Turnbull Government is creating the right conditions for Australian small businesses to grow and the passage of the Bill is another example of this.”