This paper is a non-exhaustive journey through some of the traps embedded in the Consolidations regime and suggestions about dealing with them, including:
- using a consolidated group as a bid vehicle
- bad and doubtful debts of a joining entity - a legislative botch-up
- deferred tax liabilities - complex on joining and double tax on exit
- over-depreciation adjustment - it can apply again and again and again
- the unrealised loss rules - three choices, but they’re a Hobson’s choice
- at what time of the day does a group acquire a new member?
- accrued liabilities on entry that are recognised later for tax.