Hi All,

I hope you're all winning!

I have a tax question for the accountants here.

If someone has held a company for over 12 months and is now selling the business, will they be up for full CGT? Or do they get a similar concession to a real estate asset?

The business has been held by 2 directors and shareholders and will each have an equal share of the proceeds from the sale.

Cheers,
Frank

Hi Frank, if selling the company, then yes, should qualify for the 50% discount if owned for more than 12 months.
Have your client liaise with their Accountant to make sure selling the shares in the company is the preferred option.
Todd.

Hi Frank,

Please note that companies don't get 50% discount as individuals for holding on assets for more than 12 months. There can be other things that could be looked at in terms of finding the best outcome for your client depending on what is being done and how.

This will need to be discussed in detail to get more specific information to find the best outcome.

But from what i understand from your question, simple answer is NO, they don't get similar concessions to a real estate asset.

Kind regards,
Anuraag

In addition to my earlier response, yes i totally agree with Todd --- if they are just selling shares and have held those shares for more than 12 months, individually the share holder will be able to apply 50% discount.

Cheers.
Anuraag

hi guys,

the company MAY be entitled to Small Business Entity CGT Concessions......so its really really REALLY important to ensure that the person preparing the accounts understands what is going on and what concessions are available.....so talk to a qualified and experienced CPA or CA who can help you

cheers
BC

Hi Frank,

As you can see from the four responses, it’s not simple.

The conversation needs to start with what is actually being sold? This will dictate the tax outcomes.

In my experience the client doesn’t really know. They say they are selling their business or company but don’t understand they can actually be selling a variety of different things, one of which is shares.

The accountant involved will know what is being sold. If they don’t, have the client talk to one of the guys above.

All the best.
James