Capital Gains Concessions or Reliefs

In order to encourage small business, the taxation authorities have made additional capital gains concessions or reliefs. To qualify for these, a small business must have net assets, including assets in connected entities, not exceeding $6 million. Alternatively this condition is not required to be met if a small business has an annual turnover of $2 million.

• A taxpayer may avoid capital gain tax completely if the business was owned by the taxpayer for at least 15 years (subject to age and retirement requirements).
• A 50% small business active asset reduction (over and above the general exemption of 50%) may also be available to small business.
• Certain additional retirement exemptions are also available.

A word of warning: in many cases some of these benefits may effectively be lost if a gain is made within a company. For this reason many small businesses operate through trusts or partnerships where capital gains benefits are generally more accessible.

Ensure you obtain professional advice before starting or buying a business – the longer term ramifications can be significant.

We at UHY Perth have been advising business migrants for many years on the best structures to suit your individual needs.