06 July 2010

Taxation treatment of earn out rights

Authors: Jane Trethewey, Richard Gelski, Rod Cox

As part of the Commonwealth Budget 2010-11, the Assistant Treasurer announced the Government’s intention to enact legislation to apply a ‘look-through’ capital gains tax (CGT) treatment for qualifying earn-out arrangements in the sale of business assets. As part of the announcement, Treasury simultaneously released a discussion paper outlining proposals to implement the look-through approach and which sought taxpayer submissions and comments. This article provides an overview of the discussion paper and explains what it may mean for some businesses.

Download: Taxation Treatment of Earnout Rights July 2010.pdf (77 Kb)

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