The key CGT issue when transferring assets in a non-arm’s length transaction (i.e. the sale price may not be at fair market value) is the market value substitution rules.
These rules basically mean when you’re selling assets and the transfer is deemed to involve parties not acting on an arm’s length basis, then the CGT rules impose what would be a fair market value on the transaction.
[This information comes from our eBook: Capital Gains Tax 2.0 – Issues to consider when selling your business.]
Topics: Family business, Capital gains tax, Succession planning, business advice, eBook, Business advisor, tax minimisation, JPAbusiness, Parramatta, taxation, Central West NSW, business succession
When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’
The short answer, according to the Australian Tax Office (ATO), is:
No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.
Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.
Topics: Buying a business, business advice, selling a business, Business advisor, James Price, JPAbusiness, Parramatta, taxation, GST, Central West NSW, business sale, business sale transaction advisor, tax advice
The following information comes from our updated eBook: Capital Gains Tax 2.0 – Issues to consider when selling your business.
The key CGT issue when transferring assets in a non-arm’s length transaction (i.e. the sale price may not be at fair market value) is the market value substitution rules.
These rules basically mean when you’re selling assets and the transfer is deemed to involve parties not acting on an arm’s length basis, then the CGT rules impose what would be a fair market value on the transaction.
Topics: Capital gains tax, business advice, eBook, Parramatta, Orange NSW, taxation
When working with clients who are either buying or selling businesses, we’re often asked: ‘Will I have to pay GST?’
The short answer, according to the Australian Tax Office (ATO), is:
No GST is payable on the sale of a going concern if certain conditions are met. (A ‘going concern’ is a business that is operating and making a profit.) However, as the seller, you may be able to claim input tax credits for GST you paid on expenses relating to the sale.
Of course, it’s never as simple as one paragraph when it comes to tax, so we’ve asked our business analyst Shirley Jin, who is also a CPA, to clarify those ‘certain conditions’ mentioned, and when you can and can’t claim input tax credits for GST paid on sale expenses.
Topics: business advice, JPAbusiness, Parramatta, Orange NSW, taxation, GST
