Nearing the end of the year many self- employed people stop to contemplate the new year ahead. For some 2014 may be the year that they decide to sell their business. Reasons for this decision could include retirement plans, a business transition to the new
generation, an underperforming business, ill health or just the need for a change. Fortunately some significant Capital Gains Tax (CGT) concessions may be available to help you achieve the best after-tax sale result.
The value of these concessions can have a major impact on the after-tax sale value of your business. It is well worth investigating your eligibility before listing your business for sale.
There are four small business CGT concessions that may be available:
1. small business 15-year exemption
2. small business retirement exemption
3. small business 50% active asset reduction
4. small business rollover
To be eligible for these concessions, the taxpayer must, along with related entities:
– have annual turnover of less than $2 million and run a business, or
– have net assets of less than $6 million excluding the family home and any superannuation benefits.
Depending on which concession is available the result can be a capital gains tax free sale or a sale with a greatly reduced capital gains tax debt. Utilising the concessions can also be a great way to put more money into superannuation.
If you would like more information on the small business CGT concessions or you are thinking of selling your business and would like to know the possible tax consequences please contact CNS Partners.