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11.2.1. Business Emigration

Where a company carrying on a business in Australia moves its business abroad and thereby ceases to be resident for Australian tax purposes, this triggers a capital gains event, which may occasion a capital gain or a capital loss. The gain or loss is calculated for each asset that the company owns, with a gain arising where the asset’s market value exceeds its cost base and a loss arising where the asset value is lower than its reduced cost base. The deemed disposal of a taxable asset does not apply to certain assets, notably taxable Australian real property, the business assets of a permanent establishment, and generally options and rights over such assets.