Question 1

What are the capital gains tax implications of selling a business?

Accepted Answer

The sale of a business may trigger capital gains tax (CGT) on the disposal of CGT assets including goodwill, real property, and other business assets. The amount of CGT payable depends on the cost base of the assets, the sale price, and whether any concessions apply. Small business CGT concessions under Division 152 of the Income Tax Assessment Act 1997 can significantly reduce or eliminate the CGT liability for eligible businesses with net assets below $6 million or turnover below $2 million.

Question 2

How do stamp duty obligations apply to property transactions in WA?

Accepted Answer

In Western Australia, stamp duty (transfer duty) is payable on the transfer of real property and certain interests in property-holding entities. The duty is calculated on the greater of the consideration paid or the unencumbered market value of the property. Rates are progressive, starting at 1.9% for values up to $120,000 and increasing to 5.15% for values over $725,000. Foreign buyers may be subject to an additional 7% surcharge. Various exemptions and concessions may apply, including for first home buyers and transfers between related entities.

Question 3

What should I do if I receive an ATO audit notice?

Accepted Answer

If you receive an audit notice from the ATO, you should seek legal advice immediately. Key steps include reviewing the scope of the audit notice carefully, gathering and organising relevant records and documentation, preparing a response strategy with your legal and accounting advisers, and cooperating with the audit process while protecting your legal rights. Early engagement with experienced tax lawyers can often lead to a faster and more favourable resolution of the audit.

Tax Law

Industries & Sectors

Andrew Throssell

Xian Davies

Aimee Lark

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