The Problem:
A capital gain tax expert helps small business owners selling commercial property navigate CGT rules and claim eligible concessions to reduce their tax liability.
The Questions We Asked:
- Do you qualify for the 50% general discount to reduce the capital gain on your property sale?
- Can you apply the 50% active asset reduction for additional CGT relief?
- Are you eligible for small business rollover relief upon selling the property?
- If you don’t acquire a replacement asset in time, can you still apply the retirement exemption?
The Facts We Established:
- The business owner sold a commercial property used as a warehouse by their company.
- They owned the property for more than 12 months and actively used it in their business.
- The owner is under 55 and passes the maximum net asset value test.
- They intend to apply for small business rollover relief, but may consider the retirement exemption if a replacement asset isn’t purchased in time.
The Solution We Delivered:
The accountant at EndureGo Tax interviewed the client and reviewed their background thoroughly. John and his team then conducted in-depth research into the relevant provisions of the ITAA 1997 and built a strong technical foundation for a private ruling request.
We submitted the ruling to the ATO and, after months of discussions, successfully secured a favourable outcome. This allowed our client to reduce their capital gain tax by up to $500,000 through the strategic use of small business CGT concessions.
Our private ruling carries the ATO authorisation number: 1052223691950.
A copy of the private ruling can be found here: please click for more information
We enabled the taxpayer to benefit from the following concessions based on their background information:
50% General Discount:
The owner qualified for the 50% general discount under Subdivision 115-A of the ITAA 1997 because they held the property for over 12 months before selling. This reduced the capital gain by half.
50% Active Asset Reduction:
Since the property was used in the business for more than half of the ownership period, we confirmed it met the active asset test. As a result, the owner became eligible for the 50% active asset reduction under Subdivision 152-C of the ITAA 1997, further halving the capital gain.
Small Business Roll-Over:
We identified that the owner qualified for the small business rollover relief under Subdivision 152-E of the ITAA 1997, enabling them to defer the capital gain if they acquired a replacement asset within the required timeframe.
Retirement Exemption:
If the owner failed to purchase a replacement asset in time, CGT event J5 would trigger the deferred gain. However, we ensured eligibility for the small business retirement exemption under Subdivision 152-D of the ITAA 1997. This allowed the owner to contribute up to $500,000 of the exempt amount to a complying superannuation fund, providing substantial tax relief.
How EndureGo Tax Helped:
EndureGo Tax Pty Ltd expertly navigated the CGT complexities for the small business owner. We prepared and submitted a legally binding private ruling to the ATO, securing a favourable outcome. By strategically applying small business concessions, we reduced the client’s tax liability by up to $500,000 while ensuring full compliance.
Whether you need help with active asset reduction, rollover relief, or retirement exemption, EndureGo Tax provides expert, personalised guidance.
Partner with EndureGo Tax – your trusted capital gain tax expert – to unlock the full benefits of small business CGT concessions.
