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Do I pay Capital Gains Tax on Sale of Business

Discussion in 'Accounting, Tax & Legal' started by DeeWin, 12th Oct, 2009.

  1. DeeWin

    DeeWin New Member

    Joined:
    12th Oct, 2009
    Posts:
    2
    Location:
    Gold Coast, QLD
    Hi there

    I am planning on selling my business soon and I was wondering if I will have to pay Capital Gains Tax, and if so, how much.

    I setup the business about 9 years ago with zero dollars and didn't really make any profit or income for the first 3 years. The business profit now is approx. $44,000 PA.

    I am thinking about setting up another business a little later after a break although I will trade as a sole trader again.

    Thanks in advance for any assistance.

    Dee
     
  2. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi Dee,

    You should speak to your accountant about small business concessions on Capital Gains.

    Cheers,

    Dan
     
  3. DeeWin

    DeeWin New Member

    Joined:
    12th Oct, 2009
    Posts:
    2
    Location:
    Gold Coast, QLD
    I did call my accountant but she didn't seem very clued up on CGT. I will try to find a new accountant - if anyone can recommend one on the Gold Coast that would be good.
     
  4. AsxBroker

    AsxBroker Well-Known Member

    Joined:
    8th Sep, 2007
    Posts:
    1,448
    Location:
    Sydney, NSW
    Hi DeeWin,

    I am deeply worried as Capital Gains Tax is basic Tax Law, any accountant who does not know CGT laws should get up to date asap.

    I don't know what else to say as I am still in shock...

    Cheers,

    Dan
     
  5. Chris C

    Chris C Well-Known Member

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    2nd Apr, 2008
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    1,327
    Location:
    Brisbane, QLD
  6. Rob G.

    Rob G. Well-Known Member

    Joined:
    6th Jun, 2007
    Posts:
    717
    Location:
    Melbourne, VIC
    There will be a mixture of CGT and income.

    Trading stock will be deemed income at market value.

    Sale of depreciating assets will be balancing adjustments.

    Sale of CGT assets including goodwill results in CGT.

    Also, signing any restraint clause will be CGT usually.

    Earnout agreements can be income or CGT depending on the contract.

    Big planning opportunity, especially if you are a small business and intend to start another one.

    Consulting an experienced taxation advisor on planning & detail would be money well spent.

    Cheers,

    Rob