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Tax Planning Before Selling a Business from Perth-based Business Accountants
Imagine preparing for a multi-million-dollar exit only to face unexpected tax burdens that reduce your profit – and knowing that with a well-thought-out strategy, you could have safeguarded more of your wealth.
If you’re in the process of selling your business, you need a tax strategy that starts well in advance – ideally at least a couple of years before you plan to sell. Our tax planning accountants provide the comprehensive, tailored guidance you need to get the structure right, plan the sale process effectively, distribute profits efficiently and take full advantage of special tax concessions and superannuation opportunities.
The Problem
Without early planning, you risk missing out on long-term strategies that could substantially reduce your tax liability.
Our Solution
Proper tax planning for a business sale involves a multi-step process, including:
- Structuring: Ensuring that your business is set up in a way that positions you for tax concessions. This might involve reviewing your company structure and re-evaluating trust distributions.
- Profit Distribution Strategies: How you distribute the proceeds of a sale might have a huge impact on your overall tax liability. Our tax planning approach ensures that you understand the benefits of different profit distribution methods, including the effective use of superannuation.
- Utilising Special Tax Concessions: There are various concessions available to business sellers in Australia that can significantly reduce the amount of tax payable on a sale. These include small business CGT concessions and other tailored strategies that require careful planning over several years.
- Planning for the Future: The goal is to minimise tax not just in the sale year, but in the years ahead. A well-executed tax plan helps you manage your income and wealth from the sale over time, ensuring that your financial future remains secure.
Key Benefits & Outcomes
By choosing Munro’s for your tax planning needs when selling your business, you can expect:
- Maximised Sale Proceeds: More of your hard-earned money stays with you.
- Reduced Tax Liability: Through structured planning and strategic use of concessions, your tax burden is kept to a minimum.
- Peace of Mind: With a clear, proactive plan in place, you can focus on other aspects of your business sale without worrying about last-minute tax complications.
- Long-Term Financial Security: Our planning ensures that your financial future is safeguarded, not just at the point of sale, but for many years to come.
Read Key Points & Transcript
Saving Tax When Selling
video key points
- Smart and proactive tax strategies, implemented well in advance, can significantly reduce or even eliminate capital gains tax upon selling your business, allowing you to retain more of your hard-earned wealth.
- Utilising legal tax measures such as the Small Business Rollover and Retirement Exemption can result in substantial savings, particularly for those over 55, enabling full access to sale proceeds without the need for superannuation contribution.
- The introduction of a “bucket company” can spread and reduce taxes over several years, offering the opportunity to reinvest initial savings into wealth-accumulating assets like blue-chip shares.
- Forward planning, ideally a couple or more years before selling, is crucial to identify and implement the most effective tax strategies tailored to your unique situation.
- Preparation is key to ensuring a tax-efficient transition of your business, whether it’s being sold or passed to the next generation, and seeking professional guidance early can facilitate this process.
Presented by: Rama Yudhistira
video transcript
When it comes to selling your business, you want to make sure that you keep as much of your hard-earned wealth in your wallet.
Here at Munro’s, we are proud to have successfully saved our clients hundreds of thousands of dollars in taxes using smart and proactive tax strategies. We’ve done this through legal measures, to ensure that our clients can sleep peacefully at night.
Here’s an example of what’s possible.
In this example, our hypothetical client is selling their business, including business premises. Normally, this would trigger significant capital gains tax. However, through comprehensive research and analysis, we are able to help our client utilise both the Small Business Rollover and Retirement Exemption to reduce the capital gain tax down to NIL.
This is the perfect strategy for our hypothetical client since it also allowed them to access all of the sale proceeds because they’re over the age of 55 years, meaning they don’t need to deposit the sale proceeds to their superannuation account.
As another example, we might have a client selling their business who could benefit from the use of a “bucket company”. How so? By spreading out the taxes on the business sale over many years.
This not only delays some of the taxes, but also reduces them too.
In this example, the benefit to our hypothetical client could include their ability to use the initial savings to make investments in blue-chip shares, which then grow in value and allow them to accumulate more wealth.
Smart and proactive tax strategies are not limited to what we have just shared with you. The most important thing for you to understand is that often, to save tax, you need to be proactive.
A couple or more years before selling, you should instigate forward planning. This can allow sufficient time to identify the best strategies for your unique circumstances, as well as sufficient time to implement changes, if necessary, a couple or more years before sale.
So, if you have a business, naturally at some stage it will be sold or handed down to the next generation, and to achieve this in a tax effective manner we highly recommend you prepare in advance. Please feel free to reach out, we would love to help you.
Frequently Asked Questions for Business Sale Tax Planning
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Why should I start tax planning well before selling my business?
Early planning – ideally at least two years in advance – allows you to implement long-term strategies to take advantage of tax concessions that can significantly reduce your tax liability after the sale. -
How do these tax planning strategies benefit me after the sale?
Beyond reducing your immediate tax liability, our strategies help ensure that your income and wealth in the years following the sale are taxed at their minimum. -
How do you price your tax planning services?
Munro’s is committed to fair pricing that reflects the complexity of your needs and value delivered. Refer to our pricing page and then request a personalised quote. -
Are your tax planning services available Australia-wide?
While Munro’s is based in Perth, our business accountants help people throughout WA and acorss Australia. -
What is the typical process for initiating tax planning with Munro’s?
We begin with a free Get To Know Each Other meeting, where we review your business and your objectives. Following that, we develop a tailored tax planning strategy designed to meet your specific needs and timeline for selling your business. -
How do I know if I’m ready for tax planning?
If you’re considering selling your business or even exploring your options, it’s never too early to start planning. The sooner you address these issues, the more effective your strategy will be at minimising your tax liabilities. -
What makes Munro’s the right choice for tax planning when selling my business?
With decades of experience, over 100 five-star Google reviews, a fair pricing model and a proactive, problem-solving approach, Munro’s is the trusted partner you need to secure the best financial outcome when selling your business.
Where To Begin
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