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Labor's tax plans could favour the rich, analysis shows
FBT Reminder – Odometer Reading
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Articles
Last-minute super contributions
ATO reporting requirements for builders and contractors
Pitfalls of 'late' super payment
Important - Private Health Insurance Rebate - 2012-13
Tax Time checklist - Company, Trust or Partnership - 2012
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GST Change of Use Continuing Obligations
What is 'lost' Super?
Small Business CGT Concessions
GST Private Use Continuing Obligations

April\May 2011 Newsletter

Federal Budget 2012 - 2013  -  At a Glance
Federal Budget 2012-13  -  Overview
Federal Budget 2012 - 2013
More Pressure on SME's
Who will pay the unexpected FBT?
Carbon tax to commence on 1 July 2012
Government Set on Countering Phoenix Activities
MARCH 2012 NEWSLETTER
Small Business CGT Concessions

 

The CGT Test Includes Commission Liability after CGT event.


In a recent decision, the majority of the Full Federal Court held that for the purposes of accessing the small business capital gains tax (CGT) concessions, a real estate agent commission incurred on the sale of a business could be included as a liability for the purposes of the maximum net asset value test.  This was the case even though the taxpayer was invoiced for the commission after entering the contract of disposal.

The court examined closely the documentation and made its judgement based upon its view of the timing of the legal obligation.  A different set of documentation can give an opposite outcome.

Clients need to work very closely with all their advisers if expecting the best outcome.

Small businesses can access a range of tax concessions to reduce CGT on the sale of certain assets if certain conditions are met. One of the conditions is that the taxpayer must satisfy the “maximum net asset value” test. To pass the test, the net value of all the CGT assets of the taxpayer (including affiliates and connected entities) must not exceed $6 million.

The rules are complex, with recent court cases showing that the Australian Taxation Office often win a dispute.



18th-June-2012