The Deal is Done – What Next? - The SA Estate & Business Succession Planning Day

Brett Zimmermann
life expectancy has increased significantly over recent years and a person in
their mid-fifties today can expect to live well into their eighties.
The biggest intergenerational
transfer of wealth is due to take place over the next twenty years. Coupled
with Australia’s ageing population practitioners face a period of huge
opportunity, but one that is not without its challenges.
There are significant implications
for business succession, with many business owners intending to postpone
retirement. Often business succession involves structuring a means by which the
next generation of leaders (family or otherwise) can work with a leader who
wants to ‘cut back’ rather than retire.
At the upcoming Estate & Business Succession Planning Day, some of South Australia’s leading advisers
and tax specialists will address the ‘real world’ issues and opportunities
facing practitioners, with a focus on the unique environment they operate
within in South Australia. Here we take a closer look at the session from Brett
Zimmermann, CTA; ‘The Deal is Done – What Next?’
A Senior Associate with DW Fox Tucker Lawyers, Brett has worked as
a tax lawyer since graduating in 1998 and has extensive experience in tax and
commercial law and also lectures taxation law to both undergraduate and masters
students at the University of Adelaide. Brett produces detailed commentary for Thomson Reuters, primarily in the
area of capital gains tax and tax losses, and amongst others,was principle
author of their original
commentary on Div 149 – loss of pre-CGT status, Div 118-I – look
through earnout rights, Subdiv 104-E – CGT events: trusts, and Schedule 2F
– trust losses.
Brett told us “In my session my
aim is not to provide all the answers
for CGT related questions, however I hope to remind attendees of that which they
might forget (or don’t know) to better equip them to ask the right questions
and provide their clients with practical solutions to their CGT issues”. 
When a vendor decides to sell
their business, or restructure ahead of a sale, a number of income taxation
considerations come in to play. From the tax consequences on disposal to the
continued pre-CGT status of “pre-CGT assets”, advisers need to be aware of the
potential missteps that can cause their client significant costs.
Brett’s session looks at these
potential traps, and covers the apportionment of capital proceeds between
assets, access to rollovers and small business CGT concessions, as well as earnouts
and pre-sale dividend stripping.
Brett says “CGT is not hard.  I like to present passionately and enthusiastically
trying to turn the complex into ‘simple’.  I want to be able to present the topic in a
manner that is not only informative but also engaging.”
“I would say that what I find
people often forget are the historical application of Div149 and potential for
CGT event K6 being triggered for pre CGT interests. It is often said that a pre
CGT interest in a trust or company means ‘no tax on realisation’, however that
cannot be automatically assumed. Pre CGT status in underlying assets may have
been lost in prior year, or separate capital gain made on the realisation of
the pre-CGT interest if the relevant underlying asset threshold is breached.
This could mean a higher tax liability for your client, and a surprise to the
client if you haven’t forewarned them of this possibility.  We must always manage our client’s
expectations, limit our own exposure for misleading the client as to their tax
position and if possible, mitigate that tax exposure.”
Brett has been a member of The
Tax Institute since 1998. Involved in various committees and having facilitated
on both a national and state level over the years, he was also part of the Barossa
Convention organising committee.
Asked about his focus in this
session, Brett said “I want delegates to leave better skilled to identify issues
that might have an impact on their client’s business. There is no recipe for a
perfect solution, however hopefully they’ll gain more knowledge to understand
the different factors that can affect the business.”
Following a session from The Tax Institute’s SME Tax Adviser
of the Year; Julie Van der Velde, CTA on ‘Setting the Scene’, the program looks
in turn at preparing a business for sale, due diligence, superannuation,
documenting succession arrangements, and valuations.

The SA Estate & Business Succession Planning Day took place 15 September 2017, at the Adelaide Convention Centre. The papers from the event are available on our website.

You can also read what Julie Van der Velde had to say about her session that opens the event and sets the scene for the day in the post 'Impacts of our ageing population on business succession' here.


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