TAX IMPLICATIONS OF BUSINESS EXITING
Regardless of your preferred exit option, your business should by now present an attractive proposition for any prospective buyer which brings us to a possible sale, tax benefits and tax implications.
The sale of a business often involves a range of taxes from capital gains tax, small business tax concessions and retirement concessions to roll-overs and so on.
A sale also involves other tax related issues like the tax implications of repaying or forgiving loans, the distribution of retained profits and ordinary revenue gains arising from the sale of trading stock and plant and equipment.
The value to you will be the after-tax sales value. Tax implications on the sale of a business are unique to every sale and a complex subject that can’t be discussed in full in this booklet.
There are obviously various tax benefits that can be achieved if you start early enough and work with an expert to put a proper succession plan in place.
Approaching retirement age is to contribute funds obtained from the sale of a business as an extra contribution into superannuation.
Capital gains arising to individuals and trusts receive the general 50 per cent CGT discount and capital gains arising from the sale of a small business may be eligible for a substantial reduction in tax under the small business CGT concessions.
Seek tax advice on the application for concessions relevant to your business and get the best advice on tax implications from someone who understands your business, your situation and the objectives of your succession plan.