Offsetting CGT on purchase of business

[brich]

Hello all,

Does anyone know if you can offset CGT when selling property by purchasing a business in the same year? Is there any major costs that can be offset straight away i.e. pre-paying interest on loan.

My situation is that we are looking at selling two properties which will give us a CGT bill of approx. $60K. We then intend to buy a business and so are looking for any ways in which we can offset the CGT.

Brian

 

[geoffw]

Such things are possible. Pre paying interest on a loan is possible- as long as there is a commercial reason for doing so (say a reduction in interest).

But it's extremely dependant on circumstances. It's something you should really ask your accountant.

One very small possibility. I prepurchased some training in the same year I had CGT. That saved a little. It was an indeterminate course- I purchased credits towards a course in the area in which I was working.

 

[brich]

Thanks for the reply Geoffw. I was thinking there might be something like Robert Kiyosaki talks about in America here in Australia.

 

[geoffw]

There is no direct "carry forward" of capital gains losses to offset gains in the same way as there is in the US. The best that you can do is to try and maximise your taxable losses, or minimise your income, in the same financial year in which you expect your capital gains. There is, as far as I know, no rolling over.

 

[rumin]

I'm just a beginner and have just learnt the hard way (selling a townhouse recently and my accountant not getting me all the deductions I could ,my mistake in not checking everything myself!!!!)
Anyway a little off topic but as I just learnt this ,this week:unfortunately we cannot here in Oz rollover capital gains as they can in the States but if you own a business (IPs not qualifying)and sell it....those capital gains can be rolled over and put into a super......

Ruth

 

[Mry]

In general, you can't get massive tax deductions through the purchase of a business. Unless it bleeds cash. There are also other limits to how much you can claim in losses against a business which have to be considered. And even if you could, you may not want to purchase a business in your own name anyway due to legal risks.

I always look at different alternatives when it comes to the sale of a business but the easy alternative is always to make a massive super contribution, or to purchase a new property and make some prepayments.