Business restructuring, for businesses that are working.
Most businesses are still in the structure they started in, chosen when the numbers were a fraction of what they are now. Restructuring fixes that: the right entity for the profit you make today, the assets out of harm's way, and a holding company sitting above it all.
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Two different things share this word.
Small Business Restructuring with capital letters is a formal insolvency process under Part 5.3B of the Corporations Act, for companies that cannot pay their debts. That is not this page, and it is not our team - LINK Rescue handles ATO debt and insolvency, and you should start there if cash is the problem.
What we do is the other one: taking a profitable business out of a structure that has been outgrown and into one built for where it is going. Nothing here is distressed. Most of it happens because the business got bigger than the structure.
Four signs the structure has been outgrown.
None of these are emergencies. All of them cost money every year they run.
You trade in a trust and it is profitable
A trust cannot retain profit. Anything undistributed at 30 June is taxed to the trustee at the top marginal rate plus levy, so the whole surplus has to leave the business every year - whether or not that is where you wanted it.
Everything you own sits in the trading entity
Plant, goodwill, cash, the building, the intellectual property, all inside the entity that signs contracts and employs people. One bad claim reaches every asset at once. Separating them is cheap; wishing you had is not.
You cannot sell part of it, or bring anyone in
A buyer wants shares in a company with clean accounts and a franking account. A key employee wants equity you can actually issue. Neither conversation goes anywhere from a discretionary trust, and both come up at the worst possible moment.
Surplus cash has nowhere to go but out
Profit you do not need leaves at your marginal rate, lands in a personal account, and gets invested from there. A holding company lets it leave the trading risk without leaving the tax system's cheaper side first.
Getting out of a trading trust: the two routes.
A trading trust with a company on top is the most common restructure we do. There are two ways to get there and they produce very different outcomes - one is tax-neutral, the other can put a large amount of cash in the owners' hands. Which one fits is a question of what the business is worth, what it can borrow, and what you want out of it.
01
The rollover: Subdivision 328-G
The business moves into a new company and no tax event happens. No CGT, no balancing adjustments, and the company inherits the original cost base. It is the clean, cheap route, and for most businesses it is the right one.
- Must be a genuine restructure of an ongoing business, not a step towards a sale.
- The same people must keep the ultimate economic ownership, in the same shares.
- Every party must be a small business entity, or connected with one.
- No cash comes out. You end up in the right structure, not with money in hand.
02
The arm's length sale
The new company buys the business from the trust at market value, funded by external borrowing. The trust makes a capital gain - and for an eligible small business, the CGT concessions in Division 152 can reduce or remove the tax on it. What is left is a large lump the trust can distribute.
- Needs a defensible market valuation. This is the part that has to be right.
- Needs a lender comfortable funding the acquisition - our finance team prices it.
- The company starts with real debt and a cost base that reflects what it paid.
- Owner-adjacent, so it draws scrutiny. It is done properly or it is not done.
There is a third path for incorporating a sole trader or a trustee into a company they wholly own: Division 122-A, where the assets go across in exchange for shares rather than cash and the gain is disregarded. Older, narrower, and still the right answer often enough to be on the list.
The holding company is the part worth getting excited about.
Everything above is plumbing. This is the bit that changes what the business is for. A holding company owns the shares in your trading company, and franked dividends move up to it without another layer of tax - so profit you have already paid company tax on can leave the entity that carries the risk and sit somewhere it cannot be reached by a claim against the business.
Risk sits in one entity, value sits in another
The trading company signs the contracts, employs the people and takes the risk. The holding company holds the accumulated profit. A claim against the business reaches the business, not thirty years of retained earnings.
Profit moves up without a tax event
A fully franked dividend paid from the trading company to its holding company carries its franking credits with it, so moving retained profit upstairs does not create a new tax bill along the way.
It is where the money gets put to work
Once surplus is held above the business, it can fund property, investments or the next acquisition - without first passing through anyone's personal marginal rate. This is the difference between a profitable business and actual wealth.
It makes the business sellable
A buyer buys the trading company. The holding company keeps the assets and cash you were never selling. That separation is very hard to create in the middle of a transaction and very easy to create years before one.
One yearly rhythm, three specialists
Structure and tax from us, funding from LINK Advance, and what to do with the surplus from LINK Wealth - reviewed on the same annual cadence rather than in three unconnected conversations. The group runs it as one named plan, Profit to Wealth™.
Division 7A still applies
Cash in a company belongs to the company. Using it personally without a complying loan agreement makes it a deemed dividend. A holding company is a structure to run properly, not a container to raid.
The restructure is the first move, not the whole plan.
Getting into the right structure is where we come in. What happens to the surplus afterwards - what funds the next asset, what compounds, and who is watching it - runs across lending and wealth as well as tax. The group runs that as one named plan. Profit to Wealth™, on link.com.au, sets out the whole arc and has a six-question diagnostic on it.
What is the current structure costing you?
A trading trust has to distribute its profit every year. A company does not. Put your numbers in and see the difference on the surplus you don't need to take out - then read the note underneath, because the honest answer is more interesting than a big number.
Tax deferred each year by trading in a company
$6,500
on $130,000 of profit you don't need to take out
- Tax if you trade in a trust
- $68,188
- Tax if you trade in a company
- $61,688
- Difference this year
- $6,500
This is deferred, not saved. Profit retained in a company is taxed at 25% now and topped up to your marginal rate whenever it is paid out as a franked dividend. The value is that you choose the year - and that the surplus stays working in the business at 75 cents in the dollar instead of leaving at your marginal rate.
Indicative estimate only, not advice. While all care is taken, LINK Advisors accepts no liability for figures relied on here. Always speak to your accountant.
Two clocks are running, and one of them is not law yet.
Neither is a reason to panic. Both are reasons to have the conversation this year rather than in 2028, because a restructure takes weeks and a valuation takes longer than people expect.
The proposed trust minimum tax
The 2026‑27 Budget announced a 30% minimum tax on discretionary trust distributions from 1 July 2028, with a three-year restructure rollover proposed from 1 July 2027 to let people move out. It is not yet law and the detail can still move. What it signals is harder to argue with: the gap a trading trust relies on is being narrowed deliberately.
The capital gains change that is law
From 1 July 2027 the 50% CGT discount is replaced by cost base indexation plus a 30% minimum rate on gains accruing after that date, across all CGT assets. If a route through an arm's length sale is on your table, when the gain is realised is now part of the arithmetic rather than a detail. The full detail of that Act is here.
Do you have a bucket company?
Then you have a deadline, and two financial years to use it properly. On the announced timetable, distributing new profit to a corporate beneficiary stops being effective from 1 July 2028 - but everything already in there is unaffected, and it stays a perfectly good home for retained capital.
Until 30 June 2028
It still works exactly as it does today. If the trust is producing more profit than the family needs, the surplus is still capped at the company rate rather than 47%.
After that, on current proposals
A 30% minimum tax at the trustee with no credit to the corporate beneficiary - the same income taxed twice, arithmetically around 60 cents in the dollar. Proposed, not law, and consultation is continuing.
So the job now
Check the shareholding, the Division 7A loans and whether the money is actually invested. Then decide where profit goes from 2028, which is usually the restructure this page is about.
Tax and legal in one team.
A restructure is not only a tax question. Somebody has to draft the deeds, apply for the duty exemption and, where the position is genuinely unsettled, take it to the Commissioner. Most accounting firms hand that part over and hope. We do not.
The tax side is ours
Chartered Accountants doing this work every week - modelling the routes, the CGT position, the small business concessions, the rollover eligibility and what the new structure actually costs to run afterwards. You get a written recommendation you own, whether or not you implement it with us.
The legal side is Mark Mathews
We work with Mark Mathews of Mathews Tax Lawyers on execution - deeds, transfer documents, duty exemption applications and private ruling requests. Same conversation, same plan, one team. The alternative is being handed a referral and re-explaining your business to a stranger at your own expense.
Priced as a project, not a retainer.
Restructuring is a piece of work with a start and an end, so we sell it that way: a fixed price agreed before we start, a deposit, and a written recommendation you own whether or not you implement it with us. It does not require you to become a monthly client first.
Structure review and recommendation
$3,000 - $8,000 +GST
Modelling the routes against your actual numbers, the duty and CGT positions, and a written recommendation with an implementation plan. Fixed price, agreed up front, deposit on engagement.
Implementation
Quoted on the route
Entity setup, transfer documents, registrations, ATO and ASIC lodgments and the operational move. A 328-G rollover and a funded arm's length sale are very different amounts of work, so this is quoted once the route is chosen rather than guessed now.
Third-party costs
At cost, disclosed
ASIC incorporation and annual fees, business valuation, state transfer duty, and legal fees where the documents need a lawyer. Named and estimated in the recommendation, never discovered afterwards.
Ongoing
From your fixed monthly fee
The new structure needs running: dividends and franking, Division 7A where it applies, and a yearly review. That folds into your monthly fee rather than becoming a new bill.
Based on announced measures as at 19 August 2026. The 30% minimum tax on discretionary trust income from 1 July 2028 and the associated three-year CGT rollover relief were announced in the 2026‑27 Budget and are not yet law; consultation is continuing and the final measures may differ. Duty concessions are state-based and have their own eligibility tests - eligible Queensland small businesses may access a small business restructure duty exemption on a trust-to-company transfer, and a share transfer into a holding company is typically not dutiable, but where the trading company holds Queensland land the landholder provisions need checking. Your eligibility is confirmed in the structure review, not assumed from this page.
Frequently asked questions.
What is a small business restructure rollover?
Subdivision 328-G of the tax law lets an eligible small business move active assets between entities - a trust to a company, a sole trader to a company, a partnership to a trust - without triggering an income tax or CGT liability on the transfer. The conditions are strict: it must be a genuine restructure of an ongoing business rather than a step towards selling it, the same people must keep the ultimate economic ownership, the assets must be active assets of the business, and every party must be a small business entity or connected to one. It defers tax rather than forgiving it: the receiving entity inherits the original cost base.
What is a Division 122-A rollover?
Division 122-A is the older and narrower path: an individual or a trustee transfers a CGT asset, or all the assets of a business, to a company they wholly own, and takes shares as consideration instead of cash. Any capital gain on the transfer is disregarded and the company inherits the cost base. It is the standard route for incorporating a sole trader, and it can apply to a trustee where the shares end up held by that trustee. Which of 328-G and 122-A fits depends on who ends up owning what, and getting that wrong is expensive.
Should I be trading in a trust?
Usually not, once the business is genuinely profitable. A trust cannot retain profit - anything not distributed by 30 June is taxed to the trustee at the top marginal rate plus the Medicare levy - so every dollar of surplus has to leave the business every year and find a home. A company retains profit at 25% or 30% and pays it out when it suits you. Trusts still do good work holding assets and holding shares. It is trading in one, at scale, that creates the problem.
What is a holding company structure?
A company (the holding company) owns the shares in your trading company. Franked dividends from the trading company flow up to it without another layer of tax, so accumulated profit can be lifted out of the entity that carries the trading risk and held where creditors and claims cannot reach it. That surplus can then fund investments, property or the next business, without ever having gone through anyone's personal marginal tax rate on the way. It is the single highest-value structure change we make for profitable clients.
Can I restructure without paying stamp duty?
Sometimes, and it is a separate question from income tax. Queensland and other states have their own corporate reconstruction and small business restructure duty concessions, with their own eligibility tests and their own application processes. A transaction can qualify for a 328-G income tax rollover and still attract duty, or vice versa. We price the duty position as part of the plan rather than discovering it afterwards, and we bring a lawyer in where the transfer documents need one.
How long does a restructure take?
Four to eight weeks for a straightforward trust-to-company move: a week or two to model the options and get you a written recommendation, then entity setup, valuations where the route needs them, transfer documents, ATO and ASIC registrations, and moving the operating pieces - bank accounts, merchant facilities, contracts, employees, licences and your Xero file. The tax analysis is the fast part. The operational move is what needs the runway.
My company owes the ATO - can restructuring fix that?
That is a different process and a different team. Small Business Restructuring under Part 5.3B of the Corporations Act is a formal insolvency appointment for companies that cannot pay their debts, and it is handled by LINK Rescue, not by us. This page is about restructuring businesses that are working. If cash is the problem rather than structure, start there - the wrong process at the wrong time makes things worse.
What does a restructure cost?
The advice piece - modelling the options, a written recommendation and the implementation plan - is a fixed-price project agreed before we start, typically $3,000 to $8,000 plus GST depending on how many entities and assets are involved. Implementation is quoted separately once the route is chosen, because a 328-G rollover and an arm's length sale funded by external borrowing are very different amounts of work. ASIC fees, valuations, duty and legal costs sit on top and we tell you what they are up front.
Get the structure question answered once, properly.
A fixed-price review that tells you whether to move, which route, what it costs and what it saves.
Or call 07 3899 8311.