Check the tax before you sign a deal
We will tell you what a deal costs in tax while you can still change it.Most of the tax on a transaction is decided before anyone signs anything. It is decided by what is being sold, who is selling it, and in what order the steps happen. Once the contract is executed those choices are locked, and the Commissioner assesses the deal you actually did. Income tax, GST and each state’s duty legislation all attach to the form of the deal. The Income Tax Assessment Act 1997 (Cth) (the Tax Act) is the starting point. We review a proposed transaction while the form is still yours to set.
A number you can negotiate on
You go into the contract knowing the tax cost rather than discovering it at lodgement.
Concessions secured in time
Rollovers and small business concessions have conditions that must be met before the transaction happens.
Advice that fits the deal timetable
We work to your signing date, and we say so quickly when the structure is already sound.
What does tax advice on a proposed transaction actually cover?
Tax advice on a proposed transaction is an assessment of what a deal will cost in tax before it is committed to. It covers income tax and capital gains, GST, and the duty each state charges on transfers of land, business assets or shares. The point of asking early is that most of the levers are structural. Who the seller is, whether assets or shares change hands, how the consideration is paid and when each step occurs will all change the answer.
Should I get tax advice before or after the contract is signed?
Before. Most of the levers that change the tax outcome are structural, and they close at execution. Once the contract is signed the transaction has a form, and that form is what gets assessed. Advice after signing explains the liability rather than changing it.
Will a tax review hold up the deal?
It should not. We work to your signing date. In many cases the structure is already efficient and the answer is that you can proceed. Where a change is worth making we tell you what it is and what it is worth. You can then decide whether the delay is justified.
Is this the same advice my accountant gives?
It overlaps, but it is not the same. Accountants deal with compliance and reporting. A tax lawyer advises on how the law applies to a specific structure. We also advise on whether a position would hold up if the Commissioner challenged it. On a transaction of any size, both are useful.
What about duty in another state?
Duty is a state tax and the rules differ in each jurisdiction. The rate, the exemptions and what counts as dutiable property are not uniform. Where a transaction touches more than one state, each has to be assessed separately.
Send us the deal while it is still a draft
Send us the heads of agreement or the draft contract. We will tell you what the deal costs in tax as drafted, and what could be changed to improve it.
The tax is set by the structure, not by your intentions
You have agreed the commercial terms and the deal makes sense. What you do not know is what it will cost in tax, or whether a different structure would have cost less. The difficulty is that the question has to be asked before signing. After execution the transaction has a form, and the form is what gets assessed.
- We will work out the income tax and capital gains consequences of the transaction as drafted.
- We will confirm the GST treatment, including whether the going concern or margin scheme rules apply.
- We will calculate the duty payable in each state where land, business assets or shares change hands.
- We will identify any concession, rollover or election available, and what has to happen to secure it.
- We will tell you which structural changes are worth making and which are not worth the delay.
The commercial terms are agreed and the contract is nearly final
You have negotiated hard on price and you are close to signing. Your accountant has raised a tax question that nobody can answer with confidence. The other side is pushing to execute and you do not want to lose the deal to a delay. What you need to know is whether signing as drafted will produce a bill you had not budgeted for.
What's included in your transaction tax review
- Income tax and capital gains analysis of the proposed transaction.
- GST treatment, including going concern and margin scheme eligibility.
- Stamp duty assessment for each relevant state or territory.
- Concession, rollover and election review, with the conditions attached to each.
- A written comparison of the drafted structure against any better alternative.
- Advice on the sequence in which the steps should occur.
What a late tax question costs
Tax advice sought after signing is not really advice. It is an explanation of a liability that has already arisen.
The deals where this hurts most are the ones where the fix was small. A sale of shares rather than assets. A rollover that needed the parties to be related at the right moment. A concession that required an election before a step was taken. Each of those was available while the contract was in draft and unavailable the day after execution. Meanwhile the price was negotiated on a net figure that assumed a tax outcome nobody tested. The shortfall comes straight out of the seller’s proceeds.
From an untested assumption to a deal you have priced properly
We start with the deal as drafted and work out what it produces. That means the income tax and capital gains position, the GST treatment, and the duty payable in each state where something is transferred.
Then we look at what could be different. Sometimes the answer is that the structure is already efficient and you should sign. Sometimes a change to the order of steps, the identity of a party or the description of what is being sold makes a real difference. Either way you go into the contract knowing the number, and you can negotiate the price around it.
How we review a deal before you commit
Test the structure while it can still be changed.Read the deal
We review the draft contract and commercial terms, and confirm what is actually being transferred and by whom.
Model the outcome
We calculate income tax, capital gains, GST and duty on the transaction as drafted, so you have a total cost.
Change what is worth changing
We identify the structural changes that improve the outcome, and tell you which are not worth the delay.
Deal tax reviewed before the contract is signed
Nobody wants lawyers slowing down a deal that is finally close. We know the pressure to sign, and we know a tax question raised late feels like an obstacle rather than help.
One of our lawyers is a Chartered Tax Advisor with The Tax Institute and has held that credential for 25 years. We are also recognised in Doyle’s Guide for tax law. We advise on the tax treatment of business sales, property transfers and restructures, and we work to the deal’s timetable rather than our own. Where the structure is already sound we will say so quickly. The useful answer is often that nothing needs to change.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Price the tax before you sign
Send us the draft contract or the heads of agreement. We will tell you the income tax, GST and duty consequences of the deal as drafted. We will also tell you whether a change to the structure is worth making.
More on this area of law
Read more about transaction tax, structuring and duty, and how ADLV Law can help.
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