Minimizing cgt

An acquaintance has been approached by a developer to purchase his business premises which has been rezoned to high density residential.

He had a very low entry point as he purchased over 25 yrs ago but it is a post cgt asset. Other than repairs and maintenance he has done little to the property in this time.

I haven't clarified whether he trades from the same entity or if the business (professional services) sits outside of this.

Can he reduce the amount of cgt payable on a development site by offsetting value of the property by accepting thae site's value in units + cash?

Example: paid $500k 15 yrs ago. mkt value $2m
Can you take $500k + 2 units @ $750k without incurring / minimising cgt?
 
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The CGT proceeds include ANY form. Cash, replacement assets the lot.

Its also a serious fraud concern punishable by gaol for vendor and buyer to defraud the commonwealth of GST + Income Tax and its also a State crime to defraud the state of stamp duty.
 
If an active asset of his business or leased to an associate that uses as an active asset then the small business CGT concessions might be available.

Depends upon a few conditions.
 
Thanks Guys, I caught up with him today, looong lunch :D

No intention to defraud just to minimise.

By the sounds of it, it is a business asset though he is a sole trader, property in personal name, minimal super (though he has built up several other investments).

Tossing up between a big cash settlement 15x what he paid - so there'll be huge CGT issues unless it qualifies as business asset and can be moved to super. Is tax payable in this situation (& at what rate - 15% contribution)?

The alternative is to take several units - will cgt be payable in the tax year that the contract is entered into? or is it delayed to settlement tax year ie 2/3 years time?
 
Thanks Guys, I caught up with him today, looong lunch :D

No intention to defraud just to minimise.

By the sounds of it, it is a business asset though he is a sole trader, property in personal name, minimal super (though he has built up several other investments).

Tossing up between a big cash settlement 15x what he paid - so there'll be huge CGT issues unless it qualifies as business asset and can be moved to super. Is tax payable in this situation (& at what rate - 15% contribution)?

The alternative is to take several units - will cgt be payable in the tax year that the contract is entered into? or is it delayed to settlement tax year ie 2/3 years time?

There are far too many variables for this Q in SS. Its possible its exempt or subject to concessions under the sml business concessions as Rob indicated. All well worth exploring if its an active asset used in a small business. This must be explored early to ensure that all available concessions are satisfied.

I just completed such a engagement for a client who met the 15year retirement concession AND age tests and he + wife each rolled a large sum to super. He originally was worried about all the tax he thought he may need to pay. He didn't pay a cent. These concessions reflect that many small businesses ARE the super for the taxpayer.
 
He originally was worried about all the tax he thought he may need to pay. He didn't pay a cent. These concessions reflect that many small businesses ARE the super for the taxpayer.

These are exactly his concerns - paying more than $500k in cgt or getting a concession.
 
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