Treasury has released the consultation paper concerning its review of the insolvent trading “safe harbour”.
The safe harbour was established under the Treasury Laws Amendment (2017 Enterprise Incentives No 2) Act 2017 (as part of the Government’s so called National Innovation and Science Agenda). It provides protection for company directors from personal liability for insolvent trading if the company is genuinely attempting to restructure.
The intention of the safe harbour is to encourage directors to seek advice early on how to restructure and save financially distressed but viable companies, rather than closing down prematurely to avoid personal liability. This is intended to provide “breathing space” for distressed businesses. [
To support the review of the insolvent trading safe harbour provisions, feedback from stakeholders is sought from 3 September – 1 October 2021. A consultation paper is attached to guide feedback.
Submissions will assist the review panel in its preparation of a Final Report, as specified in the review’s terms of reference.
[Tax Month – September 2021] 3.10.21