The Taxman Cometh (with questions)
Tax Law - 18 Nov 2021
The ATO has recently announced a mail-out campaign in relation to businesses utilising the Small Business CGT (SB CGT) concessions. This is due to the ATO seeing a rising number of ‘larger and wealthier’ businesses mistakenly accessing the SB CGT concessions. Although the campaign is currently directed to asking the business’ tax advisor to review eligibility, this could be used as the basis for future compliance activity.
This is an important reminder on the importance of the correct application of these deceptively complex provisions. In practice, we see a number of common mistakes that businesses and their advisors make, including:
- Not correctly identifying connected entities and affiliates when calculating turnover and asset values
- Not applying the active asset test correctly
- Excluding assets which don’t actually come within the permitted exclusions
- Assuming all liabilities can be disregarded
- Not keeping sufficient records to support the positions taken
Whether you are subject to the current mail-out campaign or not, ABA Legal Group can assist to review prior transactions, or advise on planned transactions, to:
- Assist you to work out which SB CGT concessions you might be entitled to
- Ensure your record-keeping is sufficient to support the positions taken; and
- Minimise the time and monetary impact to your business from any potential future ATO review by ensuring all the boxes are ticked at the time of the transaction
If you liked this blog, be sure to check out more of our tax related articles here.
The information contained in this blog is general in nature and should not be considered to be legal, tax, accounting, consulting or any other professional advice. In all cases, you should consult with a professional advisor familiar with your factual situation for advice concerning specific matters before making any decisions. By reading this blog, you confirm your understanding of this disclaimer.