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Overview of Income tax aspects of company formations and the corporate restructuring rules

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This series of videos explores the tax aspects of company formations, considering the various tax provisions that should be considered. The series consists of 6 videos:

Introduction

Outlines some of the the general tax aspects when setting up a company and when selling a going concern to a company as well as an overview of the corporate rules set out in Part III of the Income Tax Act.

Part 1

Setting up a company: aspects of shareholder financing.

Selling a going concern to a company: general tax issues.

Asset for share transactions: explains the general tax rules that will apply in the absence of the corporate rules, including section 40CA; and then the application and effect of the section 42 rollover relief.

Part 2

This video explains the effect of applying the section 42 Roll-over relief, with an illustrative example.

Part 3

Further explores the effects of applying section 42, considering what happens when the assets are sold for a combination of shares and cash, as well as the clawback provisions in section 42.

Part 4

Looks at other considerations, in this case, the tax adjustments that must be made under section 24BA when there is a value mismatch.

Part 5

Other issues to consider, in this case the deductibility of interest on a loan raised to fund the acquisition of shares, and the circumstances in which section 24O might apply.