SELLING YOUR BUSINESS AND WANT TO SAVE TAX?
There are very generous Capital Gains Tax advantages for those selling their business often viewed as a retirement nest egg.
- There is the 15-year Capital Gains tax concession, and
- There is the Retirement rollover of the proceeds of a business sale
There are different maximum amounts for each of these considerations for which both could be used depending on the circumstances.
The key point is who controls the business being a minimum of 40% control which is calculated using several methods. The structure of the business could be an individual, a company, or a trust.
It is highly important that you check with your adviser and accountant especially if you are intending on making changes before you sell. This could upset the Capital Gains Tax concessions. Dangerous changes could be; a change of directors of a company, a change to shareholders or anything that could affect the control of the business. It is far better to check this out before any ‘sign on the line ‘occurs as it is very hard to undo.
The active asset rule is also another advantage offering Capital Gains Tax savings. Should you own your business office, building, warehouse, or factory, the use of that property to run your business offers an additional 50% discount.
Do your homework and get advice before any sale of your business.