The Tax Office has recently provided its views regarding the wording of a sale of business contract and apportionment of assets. At a recent Regional Tax Practitioner Working Group meeting, a member raised the following issue.
When a client sells or purchases a business, a practitioner may insist that the assets be apportioned (plant/equipment/vehicles and goodwill) and have these apportioned figures written into the contract. However, most solicitors who draw up the contract take the view (and quite often insist) that apportionment is unnecessary and each party should be able to decide on their own apportionment. Many contracts have no asset apportionment. Each party then arranges the apportionment to minimise their individual tax position.
Source: North Queensland Regional Tax Practitioner Working Group – minutes of 30 April 2009 meeting
This article appeared in Thomson Reuters Weekly Tax Bulletin (31st July 2009). Australia’s most comprehensive and informative tax news service, it covers, in clear terms, all tax and related developments from cases, new legislation, tax rulings and major announcements to detailed practitioner articles. To find out more, click here
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