‍Understanding the intricacies of taxation can be a daunting task, especially when it comes to the Small Business Capital Gains Tax(CGT) Concessions. These concessions can have a significant impact on the tax outcome of your business or the sale of a CGT business asset.

Thankfully, there’s not too many variables to wade through, as Australia offers four types of CGT concessions. Having said that, determining which one applies to your specific situation can be a complex process that mean it’s worthwhile enlisting the help of the Attune team so you can ensure you take the right path.

To help you start the process, let's take a closer look at the four CGT concessions available:

1. 15-year Exemption: If you're 55 years or older and either retiring or permanently incapacitated, the 15-year exemption may provide total relief from CGT when you sell a business asset. To qualify for this exemption, you must have owned the asset for at least 15 years, with at least 7.5 of those years being classified as an active asset. This concession allows you to disregard the entire capital gain from the sale.
2. 50% Active Asset Reduction: The 50%active asset reduction concession offers a 50% reduction of the capital gain made on the sale of an active asset. An active asset refers to an asset that is used or held ready for use while running your business. This concession is often combined with other concessions to achieve greater CGT relief.
3. ‍Retirement Exemption: The retirement exemption provides relief up to a lifetime limit of $500,000. If you're under55, the exempted amount must be paid into a complying superannuation fund or aRetirement Savings Account (RSA). However, if you're 55 years or older, there is no requirement to contribute to a complying superannuation fund or RSA.
4. Rollover Concession: The rollover concession allows you to defer your CGT liability when you sell an active asset and buy a replacement active asset within two years before or one year after the original CGT event. The CGT liability is deferred until the replacement asset is sold.

‍Two of the most frequently asked questions about SmallBusiness CGT Concessions:

1. Can I use more than one CGT concession? Yes, certain concessions can be applied in conjunction with others, depending on your specific circumstances.
2. Can these concessions apply to a pre-CGT asset? No, the CGT concessions only apply to CGT events, and pre-CGT assets are excluded from CGT events.

Remember, the complex world of Small Business Capital Gains Tax doesn't have to be overwhelming. With the right assistance, you can navigate it successfully, protecting your financial interests while ensuring full compliance with the Australian Tax Office requirements. Your focus should be on growing your business, and ours is to support you in doing so.

So what’s my next move?

Understanding these CGT concessions – even at the top level– and their applicability is crucial for effective tax planning strategies, so we suggest at least re-reading the above to get you across them to start with.But remember, at Attune Advisory, we're here to guide you through this process from start to finish – our expert team can provide you with personalised advice tailored to your unique situation, ensuring you maximise the benefits from theCGT concessions available to you.

You can book an appointment to discuss your current situation and how we can help you reach your goals via email or call us at1300 866 113.

As a small or medium-sized business owner, you have a lot on your plate. Among the many complexities you face, understanding how dividends from your business are taxed can certainly rank as one worth dealing with!

With that in mind, we thought we’d give you some guidance below to help make the taxation of dividends a little more manageable. 

First, let's start by understanding what dividends are.

Put simply, dividends are essentially a portion of a company's profits distributed to its shareholders. They serve as a way to return capital to the shareholders and reward their investment in the company. It is of course important to note here that in the eyes of the Australian TaxOffice, dividends are considered income to the shareholder and are, therefore, subject to income tax.

The tax treatment of dividends can vary based on several factors, including the size of the dividend, your other sources of income, and whether the dividends are fully franked or unfranked.

Who’s Frank?

Fully franked dividends come with franking credits, also known as imputation credits.

These credits allow Australian companies to pass on the tax paid at the company level to their shareholders. When you receive fully franked dividends, the company has already paid tax on them. As a shareholder, you might be entitled to a tax offset, which helps avoid double taxation. If the franking credit exceeds your personal tax payable, you may even be eligible fora refund. However, if the franking credit is less than your personal tax payable, you will be liable for the shortfall.

On the other hand, unfranked dividends have not had any tax paid at the company level. As a result, these dividends are fully taxable to you as the shareholder.

Now, let's address some frequently asked questions regarding the taxation of dividends:

1. Do I have to declare dividends on my tax return? Yes, all dividends received, whether fully franked, partially franked, or unfranked, should be reported on your tax return. This includes dividends that were reinvested.
2. How does a dividend tax credit work? InAustralia, a franking credit or imputation credit is a credit for the tax a company has already paid on its profits. When a company distributes its profits as dividends, shareholders receive a franking credit that can be offset against their tax liability.

‍Important next steps …

Dividends can be a valuable income stream for you or your business, but understanding how they are taxed is crucial for effective tax planning. If you need help understanding how dividends from your business are taxed or have a complex tax situation with regards to dividends, our team atAttune Advisory will provide a comprehensive analysis of your specific situation, answer your questions, and guide you towards the best strategies for your financial success.

Make your financial situation your priority by booking an appointment via email or by giving us a call us on 1300 866 113.

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Are you a business owner feeling the weight of high marginal tax rates despite running a profitable enterprise? If so, it's time to consider incorporating your business and we can help ... Incorporation can provide significant tax benefits by allowing you to leave profits within the company, which are then taxed at a more moderate corporate tax rate of 25%.

The 25% corporate tax rate applies to businesses with an annual aggregated turnover below $50 million, as long as their passive income(such as rents, interests, dividends, etc.) does not exceed 80% of their assessable income. By incorporating your business, you can take advantage of this lower tax rate, allowing you to retain more of your hard-earned profits.

However, it's important to understand that incorporating your business involves navigating certain rules and regulations. The PersonalServices Income (PSI) rules, in particular, may impact how income is attributed to you as the business owner. If your company provides personal services and does not meet the required results, 80%, unrelated clients, business premises, and/or employment tests, the income of the company could be attributed to you personally.

To ensure a smooth and successful incorporation process, it's crucial to work with experienced professionals like the team at AttuneAdvisory. Our experts have in-depth knowledge of the tax landscape and can guide you through the complexities of incorporation, ensuring that you maximise the tax benefits available to your business.

By incorporating your business, you not only unlock the potential for lower tax rates but also gain access to a range of other advantages. These include increased credibility and professionalism, limited liability protection, potential access to more favourable financing options, and enhanced opportunities for business growth and expansion.

At Attune Advisory, we pride ourselves on providing strategic, tailored solutions that meet the unique needs of each business we work with. Our team will carefully analyse your situation, taking into account factors such as your business structure, industry, and growth plans. We'll then develop a comprehensive incorporation strategy that aligns with your goals, ensuring you reap the maximum tax benefits while remaining compliant with relevant regulations.

As you contemplate the advantages of incorporating your business, we recommend consulting the Australian Taxation Office (ATO) website for additional information. The ATO website provides valuable resources on individual income tax rates, including details on the 25% corporate tax rate and the conditions that must be met to qualify for this rate.
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Don't let high marginal tax rates hinder the growth and profitability of your business. Take the first step towards tax optimisation and financial success by incorporating your business with Attune Advisory. Our team of seasoned professionals is here to guide you through the process, ensuring you unlock the tax benefits you deserve. Call the team today on 1300 866 113 or send us an email to schedule a consultation and let us help you navigate the path to amore tax-efficient future for your business.

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Are you a business owner looking to sell your business and embark on a new chapter? The process of selling a business can be complex and overwhelming, but with the right guidance, you can set yourself up for a successful sale.

Below, we'll explore the essential steps to prepare for selling your business, including where and when to sell, how to navigate joint ownership, the key steps in the business sale process, and how your accountant can support you throughout the journey. 

Preparing to Sell: Valuation is Key

Before putting your business on the market, it's crucial to determine its value. However, valuing a business and this can be a challenge for many. To arrive at a fair valuation, it's recommended to employ forecasting models informed by external economic data, conduct due diligence, and emphasise current cash flow. Working with the Attune team’s specialists can ensure that you reach an accurate and realistic valuation that attracts potential buyers.

Where to Sell: Choose the Right Approach

When it comes to selling your business, you have options.One approach is to engage a business broker who will act on your behalf, working to secure the best price, ensure legal compliance, and make the selling process as smooth as possible. While brokers typically charge an upfront fee and take a commission, their expertise and industry-specific knowledge can be invaluable.

Alternatively, you can choose to sell your business independently, leveraging technology and doing the legwork yourself. This option requires organising your financials, advertising online, handling enquiries, and arranging a contract of sale with the assistance of a lawyer and your accountant (that’s us!).

Timing the Sale: Factors to Consider

Timing plays a crucial role in maximising the sale of your business. Just as winter is the prime season to sell coats, every industry has its peaks and troughs. Consider variables such as seasonal trends, the local economy (including cash rate status), industry-specific events, competitor movement, and your cash flow and financial history. Understanding these factors will help you determine the optimal time to put your business on the market and attract potential buyers.

As part of our work with your business sale, we can provide some insights and guidance on timing the sale of your business.

Selling as a Joint Owner: Managing Complexity

If you co-own your business with someone else, selling adds an additional layer of complexity. Ideally, you will have a shareholder or partnership agreement in place that outlines the respective shares of each owner, processes for exiting the business, and dispute resolution mechanisms.However, if such an agreement doesn't exist, it's crucial to address questions like what happens if you want to sell but your partner doesn't. Working with a solicitor and the Attune team can help you navigate these complexities and ensure a fair and smooth sale.

The Business Sale Process: Step-by-Step

Once you've defined your sales strategy, including the desired price and the approach you'll take, it's time to proceed with the business sale process. This involves advertising your business through appropriate channels, organising your paperwork (financial, loan, and tax statements), negotiating the sale price and terms, obtaining a professional contract of sale, communicating with your employees about the impact of the sale, exchanging funds on the settlement date, transferring lease agreements and assets, signing over directorship, and notifying relevant parties about the sale.

The Role of your Accountant: Your Trusted Partner

Even if you choose to handle the sale on your own, partnering with the Attune team is crucial for a smooth and successful transaction. Here's how we can support you:

1. Accurate Valuation: We can be instrumental in calculating a thorough valuation that works with your expectations, enabling you to set a competitive sales price.
2. Asset Management: If you want to retain ownership of certain assets while selling the business, we can guide you through the complexities to achieve your desired outcome.
3. Sale Structure: Whether you're navigating a joint partner sale or considering a staggered takeover, we can show you through your options and ensure compliance with relevant regulations.
4. Post-Sale Planning: After the sale, you'll need to make wise financial decisions regarding the proceeds. The Attune team can help you explore options to build a strategic roadmap to set you up fora solid financial future.

Selling your business is a significant undertaking that requires careful planning, expert advice, and meticulous execution. By partnering with Attune Advisory, you can ensure that your sale is optimised for success. Our experienced team will work closely with you to guide you through the entire process. Set yourself up for a smooth and rewarding business sale by contacting Attune Advisory on 1300 866 113 – you won’t regret it.

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