Hi :
I am wondering if capital gains tax can be minimised by buying and selling under a business name.
What does the taxman think of this ?Cheers : Brad
i was also thinking along the same lines….. and i would like to get some info on this.
OK:
Went back to a book that I read a year or so back, "How investing in Commercial Property really works" and the way I C it is, you can set up a company and only pay 30% tax, BUT! there is a whole of of legal reporting to do and it really seems to me that it's a whole lot of paperwork and legal stuff ie: reporting, laws to learn and know and generally way too much pain and anguish to make it worthwhile.
I think it's back to hold for 12 months as being the easiest and simplest way, but will continue to look for another alternative.
Cheers : Brad
Buying and selling in a Company is fine as you will be taxed as trading profit at a rate of 30% however you will not get the concessional CGT rate which would apply if you held the asset for 366 days +.
It is all horses for courses.
Richard Taylor | Australia's leading private lender
And just remember that a business name is just a name, not an entity. So if you just register a name with fair trading, it is the same as buying it yourself – it is your name that will go on title.
You should be looking into setting up a trust, usually a discretionary trust. With trusts, the property will be purchase in the name of the trustee, which can be an individual or a company – or both. The trustee is the legal owner, but it is the beneficiaries who are the beneficial owners. This creates many advantages including tax reduction and asset protection.
And don't forget with a company you will only pay 30% tax, but with a individual (or evena trust) you may be able to cap the CGT at 24% when the 50% CGT discount is taken into account.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Brad
Cheaper even still to purchase it in a SMSF and then pay only 10% concessional rate when you sell it.
Richard Taylor | Australia's leading private lender
Hi Richard,
Forgive my ignorance but what's an SMSF I have not heard of it before?Self Managed Super Fund
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