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Making the most of limited resources in tax due diligence - what to focus on in the purchase of a corporate entity paper

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Published on 26 Oct 06 by NEW SOUTH WALES DIVISION, THE TAX INSTITUTE

Normally due diligence is carried out where a consolidated group is acquiring another consolidated group or a stand alone entity or group of entities - are you looking at the most significant matters or are the entities being acquired bringing unrecognised problems into the group? This paper covers topics including:

  • joint and several liability exposure arising from membership of previous consolidated groups - lack of visibility
  • risks from open assessment periods beyond four years
  • latent tax liabilities which could be triggered on acquisition, for example
    • CGT events L3, L5 and J1
    • crystalisation of unrealised gains
  • limitations on availability and utilisation of tax attributes
    • changes in relative market values of group companies
    • impact of gearing on available fraction calculations
    • capital injection and other adjustments
  • structural tax issues for the carry-forward entity arising from historical positions.

Author profile

Grant Wardell-Johnson
Photo of author, Grant WARDELL-JOHNSON Grant Wardell-Johnson has been involved in international taxation for more than three decades, most recently as KPMG Global Tax Policy Leader based in the United Kingdom from 2021 to 2025. Prior to that he was the Australian Tax Policy Leader for a decade including Co-Chair of the National Tax Liaison Group from 2015 to 2021. He has been leading tax partner for many Australian corporates and M&A transactions. - Current at 24 March 2026
Click here to expand/collapse more articles by Grant WARDELL-JOHNSON.

 

This was presented at Annual Corporate Tax Intensive .

Get a 20% discount when you buy all the items from this event.

Individual sessions

Managing communications and tax risk in a corporate tax group - an internal view

Author(s):  Chris MILLETT

Materials from this session:

Making the most of limited resources in tax due diligence

Author(s):  Grant WARDELL-JOHNSON

Materials from this session:

Share capital tainting

Author(s):  Richard BUCHANAN

Materials from this session:

ROSA: not just a pretty name - managing compliance post ROSA

Author(s):  Andrew MILLS

Materials from this session:

Managing dealings within a corporate tax group and with the ATO - an external view

Author(s):  Craig JACKSON,  Fiona MOORE,  Timothy DALTON

Materials from this session:

Further details about this event:

 

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