Work out the CGT and stamp duty on a transaction
We will tell you what the capital gains tax and duty will be, and which concessions you qualify for.Two taxes attach to most transfers of value in Australia, and different governments assess them on different bases. Capital gains tax is federal and falls on the seller. Duty is a state tax and usually falls on the buyer. The concessions that reduce them have conditions attached. The small business capital gains tax concessions in the Income Tax Assessment Act 1997 (Cth) (the Tax Act) are the clearest example. Their conditions must be satisfied before the transaction happens, not after.
The net figure, not the headline price
You find out what the sale actually leaves you with before you agree to a price.
Concessions tested against the conditions
Each small business concession is checked line by line, so nothing is claimed that cannot be sustained.
Duty assessed state by state
Duty rates and exemptions differ in each jurisdiction, and every state the deal touches is assessed.
What are CGT and stamp duty, and why are they assessed separately?
Capital gains tax is a federal tax on the gain made when an asset is disposed of. It is worked out under the Tax Act and falls on the person disposing of the asset. Duty is charged by each state and territory on transfers of dutiable property, which usually includes land and can include business assets and shares. Because different governments levy the two on different bases, a structure that reduces one can increase the other.
Do the small business CGT concessions apply to me?
It depends on tests that look past the business itself. The main ones are a limit on the net value of your assets and those of connected entities. There is also a requirement that the asset was active. Your age and what you do with the proceeds can matter too. The conditions are assessed at the time of the transaction.
Who pays the stamp duty?
Usually the buyer, though the contract can allocate it differently. Duty is a state tax, so the rate and the exemptions depend on where the dutiable property is. If a transaction touches more than one state, each is assessed separately.
Can I restructure now to qualify for a concession?
Sometimes, and the answer depends on how much time there is. Some relief requires a holding period. Some requires the structure to be in place well before the sale. A restructure done for the purpose of accessing relief also has to be considered carefully. Ask before the sale is on foot, not after.
Is stamp duty payable on a share sale?
It can be. Some states charge duty on the transfer of shares in a company that holds land above a threshold. These are commonly called landholder duty rules and they differ between jurisdictions. A share sale is not automatically free of duty.
Get the numbers before you commit to a price
Tell us what is being sold and who owns it. We will work out the capital gains tax and the duty, and confirm which concessions the transaction qualifies for.
Concessions have conditions, and most of them close at settlement
You know there is capital gains tax on the sale and duty on the transfer. What you do not know is how much, or whether you qualify for any of the relief available. The concessions are worth a great deal when they apply. Each has conditions, and several have to be satisfied before the transaction occurs.
- We will calculate the capital gain and the tax payable by the entity that owns the asset.
- We will test your eligibility for each of the small business capital gains tax concessions.
- We will assess the duty payable in every state where dutiable property is transferred.
- We will check whether a rollover, exemption or corporate reconstruction relief is available.
- We will tell you what has to happen, and by when, to secure any relief you qualify for.
You are selling and nobody has put a number on the tax
You are selling a property, a business or a parcel of shares. The price is agreed or close to it, and you have assumed a net figure in your own planning. Nobody has worked out the capital gains tax. Nobody has checked the duty position in the state where the asset sits. You need to know whether the proceeds will be what you expected.
What's included in your CGT and duty assessment
- Capital gains calculation for the disposing entity.
- Eligibility assessment against each small business capital gains tax concession.
- Duty assessment for every relevant state or territory.
- Rollover, exemption and corporate reconstruction relief review.
- A written list of the conditions to be met, and the deadline for each.
- Advice on the timing and sequence of the transaction steps.
The concession you were entitled to and did not claim
The small business capital gains tax concessions can reduce a gain substantially, and in some cases remove it. They also carry some of the most detailed conditions in the Tax Act.
The tests look at the value of your connected entities and whether the asset was active. They also look at how long it was held, and at your age and circumstances at disposal. Some require an election. Some require a payment into superannuation within a set period. Every one of them is assessed by reference to the moment of the transaction. A seller who sells first and asks afterwards may find a restructure done a month earlier would have qualified them. By then nothing can be done about it. Duty works the same way, and exemptions for transfers between related entities depend on facts that exist at the time of the transfer.
From an assumed net figure to a tested one
We work out the capital gains position on the asset you are actually selling, in the hands of the entity that actually owns it. That distinction matters, because the concessions are tested against the owner rather than the business.
Then we assess duty in each state where dutiable property changes hands, and check whether any exemption or corporate reconstruction relief applies. Where a concession is available but its conditions are not yet met, we tell you what has to happen and by when. Where the structure would need to change, we tell you what that change is worth. You can then decide whether it is justified.
How we assess the tax on your transaction
Work out both taxes, then secure the relief available on each.Identify the owner
We confirm which entity holds the asset, because the concessions are tested against the owner rather than the business.
Run both calculations
We work out the capital gain and the duty, and identify every concession, rollover and exemption in play.
Secure the relief
We set out what has to be done, and by when, for you to qualify for the relief available.
Both taxes assessed, with every concession tested
It is an unpleasant surprise to sell well and find the net proceeds far below what you planned around. The difference is usually not the price. It is relief that was available and was not claimed in time.
One of our lawyers is a Chartered Tax Advisor with The Tax Institute and has held that credential for 25 years. We are also recognised in Doyle’s Guide for tax law. We assess capital gains and duty on business sales, property transfers and share transactions, and we work through the concession conditions line by line. Where you do not qualify we will tell you plainly. A concession claimed without its conditions met invites an amendment and a penalty.
Our great lawyer guarantee
Six principles we hold to, whatever you bring us and however long it takes.
Take the time
We listen carefully to understand what you want to achieve, then step you through the advice and the documents.
Share our knowledge
We pass on as much as we can, so you can make your own informed decisions.
Stick to our knitting
We only do what we are good at, so you never pay for our learning.
Work as one team
Someone is always available to answer your question or point you the right way.
Fair pricing
A fixed or capped quote for advice and documents, so you do not carry the price risk.
It is your show
We are in it for a front row seat to witness your success, not for our egos.
Find out what the sale will really net you
Tell us what is being sold, who owns it and where it is. We will calculate the capital gains tax and the duty, and confirm exactly which concessions you qualify for.
More on this area of law
Read more about capital gains tax, stamp duty and the small business concessions, and how ADLV Law can help.
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