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Case Studies

Case Study - How a client sold his business for $650,000 and paid no tax.

Sam James started his business in 2002, 100% Australian owned and run company. A wholesale food distributor, the business is known in the industry for their great service and excellent products. Their main focus and objective is to 'make great food accessible' to up market cafes, restaurants and bars
throughout Sydney. 

With Sam's enthusiasm and knowledge he grew his business into a highly recognized and successful business with a turnover in 2012 of approx. $3.5 million. In 2013 Sam sold the business for $650,000. Sam had not yet reached retirement age and was looking at using this money to start a new business. 

The Challenge 

From the sale of the business, Sam was facing a capital gains tax bill in excess of $100,000. In a meeting with Twelve Chartered Accountants Sam wanted to know if he could legally reduce this tax bill. 

The Solution 

The solution was complicated, and required a thorough understanding of the small business tax concessions and also an understanding of how to apply these principles. 

After extensive planning we were able to apply these principles to the sale of the business, which included using the capital gains tax active asset concession, the CGT small business roll over relief, and the other various CGT retirement exemptions to reduce the capital gains tax payable to $NIL. 

We are pleased to report that Sam has since bought a new business which he is very excited about. Even though Sam is not at the retirement age, he has asked us to develop a retirement plan for his future.

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