The CGT small business concessions, often celebrated for their ability to eliminate or reduce capital gains, come with a lesser-known gem – the “Roll-Over Concession.” This powerful tool can be a game-changer for small business owners, depending on your circumstances and long-term business plans.
So, what’s the Roll-Over Concession all about?
Essentially, it lets you defer the assessment and taxation of your capital gain for two years if you acquire a “replacement asset” within this period. It buys you time to make informed decisions about your money and your business’s future.
But here’s where it gets interesting:
If you don’t spend the rolled-over gain on a replacement asset within those two years, the gain gets reinstated. The silver lining? This reinstated gain qualifies for the “Retirement Concession.”
The Retirement Concession can be a game-changer, too:
If you’re 55 or older, you can enjoy a tax-free capital gain of up to $500,000 or channel the gain into your superannuation fund.
Timing is everything:
The 2-year deferral might just line up perfectly with your retirement plans. Imagine accessing the retirement concession precisely when you need it most!
What if your replacement asset’s purpose changes?
If a replacement asset stops being used for business after the 2-year period, and you face a reinstated gain, don’t worry. It’s still eligible for the retirement concession. Moreover, you can roll it over again, giving you incredible flexibility for your business’s financial future.
Let’s illustrate this with an example:
Imagine selling your gym business and making a capital gain. With the roll-over concession, you can continuously roll it over by acquiring new gym equipment in other gyms you own. Each time the equipment wears out or gets disposed of, the gain can be used for replacement. Keep rolling over until retirement, and then crystallize the gain.
However, a word of caution:
Like all tax matters, navigating these concessions requires the expertise of a tax professional. They can help you maximize these opportunities and ensure you’re making the right moves for your small business.
the CGT small business concessions are more than just tax perks; they can be vital tools in your long-term business and retirement strategy. Embrace the roll-over concession and let it work wonders for your small business journey.
#CGT #SmallBusiness #TaxConcessions #RetirementPlanning #TaxStrategy #BusinessSuccess
The material and opinions in this article are those of the author and not those of AP Family Office. The material and opinions in the article should not be used or treated as professional advice and readers should rely on their own enquiries in making