MGS Private advises on using the small business CGT concessions to move business property and businesses to a new entity before the turnover threshold is exceeded.
In Western Australia this can now be done without incurring a liability to duty. Whether it be the 15-year exemption, 50% discount, retirement exemption or rollover MGS Private can assist with the strategy of restructuring before the turnover threshold is exceeded and achieve a higher cost base.
These concessions are designed to reduce, disregard, or defer capital gains tax on assets used in small businesses. Here’s a concise overview:
- Small Business 15-Year Exemption:
- Purpose: Allows you to reduce or disregard CGT on a business asset if you’ve owned it for at least 15 years and are aged 55 or older.
- Eligibility: You must meet specific conditions related to the asset and your business.
- Claiming the Exemption: Follow the guidelines to claim this concession.
- Small Business 50% Active Asset Reduction:
- Benefit: Reduces the capital gain on an active asset by 50% (in addition to the standard CGT discount if conditions are met).
- Eligibility: The asset must be used in your small business.
- Application: Apply this reduction when calculating your capital gain.
- Small Business Retirement Exemption:
- Purpose: Allows you to reduce or disregard CGT on active assets when you retire.
- Eligibility: You must meet specific criteria related to age, ownership, and retirement.
- Claiming the Exemption: Follow the process to claim this concession.
- Small Business Roll-Over:
- Defer Capital Gain: Allows you to defer all or part of a capital gain made from selling an active asset.
- Conditions: The asset must be used in your small business, and the roll-over applies to specific events (e.g., restructures, changes in ownership).
In relation to relying on the above concessions in relation to a movement within a family group the movement of dutiable property can now be undertaken by MGS Private without duty.
