Retire Wealthy with the Small Business Capital Gains Tax Exemption

This tax saving strategy is available only to owners of small businesses whose total individual worth is less than $6 million (excluding their super and home).

Essentially the strategy enables you to convert an assessable capital gain from the sale of some business assets into a tax free amount. For a person who is 55 years or over, the resultant tax free amount can be cashed out or rolled over. Where the person is under 55 the amount must be contributed to a complying super fund.

The tax savings from this strategy can be considerable and may mean that you will be able to enjoy a much more comfortable retirement. Each significant individual business owner is entitled to a lifetime limit of $1 million (indexed) of CGT exempt assets from this provision in addition to contributions allowed under the post-tax contributions cap.

Some attractions of CGT retirement contributions are:

• No contributions tax applies
• When the benefit is received, it is tax free

Special conditions apply to this exemption. If you are contemplating selling your small business assets you should seek professional advice to first see if you can qualify for this valuable exemption and second ensure that the appropriate elections are made with the ATO.

If you would like more information on the small business capital gains tax exemption or would like to speak to a financial planner to learn just what you need to do to qualify for the exemption simply follow this link: Enquiries and mention "Small business CGT Exemption".

Source: Personal Wealth

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