How to sell a business and pay no tax

How to save tax 

Hands on your heart: Have you ever thought of selling your business?
If you did then this is something you definitely want to know about.

There are tax strategies you can use to make sure that when you
sell your business you pay no tax. However, they only apply to businesses that pass either the $2 million turnover test or the $6 million net assets test.

The three tax strategies that can achieve this are listed in the order of their attractiveness:

  1. 15 Year Small Business CGT Exemption.
  2. Retirement Exemption – CGT Concession for Small Business.
  3. Small Business CGT Rollover.

Although the three tax strategies can all result in no tax payable on the business sale, they are not equally attractive. Tax strategy 1 is the best as if this is applied; no tax is payable now or in the future.

In contrast, with tax strategy 3, no tax is payable now, but it is only deferred into the future.

Is your business ready to be sold? 

While it’s good to know that you can minimise or eliminate any tax when you sell your business, not everyone is confident that they will get a good return.

The best way to prepare your business for a sale is to start early in the piece and create an Exit Plan. A buyer would not merely look at your Profit & Loss Statements.

A robust Exit Plan would typically includes an audit of your workflow processes and administration systems, your customer base and the value add you provide to your customers.

Further, you need to have your personal finances and retirement plan structure in order so that you can maximise the benefit of the
business sale to you and your family.

If you want to know whether your business is ready for sale please contact us to arrange for a Business Sale Readyness Check.

Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances.