Ask any owner planning a sale what number matters and they will name the price. Yet two owners can sell identical businesses for identical prices and retire in very different positions, because the decisions made in the twelve months around settlement, about tax concessions, superannuation and where the money lives afterwards, can move the final result by hundreds of thousands of dollars. The price gets the attention. The decisions after it do the work.
The small business CGT concessions can cut the tax on your sale to zero
Australia gives small business owners four capital gains tax concessions when they sell active business assets: a full exemption for assets held over 15 years by an owner who is 55 or older and retiring, a 50 per cent active asset reduction, a retirement exemption on gains up to a $500,000 lifetime limit, and a rollover that defers the gain. Stacked in the right order, they can take the tax on a sale all the way to zero.
Getting you through the eligibility gates and choosing which concessions to claim, and in what order, is your accountant’s territory, and a good one earns their keep many times over on a sale. Timing matters more than usual right now. The government is rewriting the general capital gains rules from 1 July 2027 while keeping all four small business concessions, and it has moved to widen the 50 per cent active asset reduction to businesses turning over up to $10 million. If a sale is on your horizon, the window before the new rules start is worth a deliberate conversation, well before you sign anything.
Here is the part many owners never hear: some of those concession choices are also superannuation choices, and once the tax return is lodged, the door closes.
The super window: up to $1,935,000 can go in on top of the normal caps
Money linked to the 15 year exemption, or amounts within the retirement exemption’s own $500,000 lifetime limit per person, can be contributed to super and counted against a separate lifetime capital gains cap of $1,935,000 for 2026/27, rather than the ordinary non-concessional cap. That headroom is not blocked by an already healthy super balance the way normal after tax contributions are. For most owners, the sale of the business is the single largest sum they will ever be able to move into an environment where earnings are taxed at a maximum of 15 per cent and can reach zero in retirement phase.
Run the numbers on a $2 million sale by a 60 year old who qualifies for the 15 year exemption. The gain is tax free, and up to $1,935,000 of the proceeds can go into super under the capital gains cap. Add the ordinary after tax caps, $130,000 in a year or up to $390,000 under the bring forward rule if their total super balance is low enough to allow it, and nearly the whole sale can end up inside super. Earning 5 per cent, that money produces around $100,000 a year taxed at $15,000 or less, against roughly $47,000 for the same earnings in the hands of a top rate taxpayer.
The catches are real. The contribution paperwork must reach the fund on or before the day the money does, the deadlines hang off your tax return and settlement dates, and money in super is locked away until you meet a condition of release. Miss the form and the contribution counts against your ordinary caps instead, which can trigger excess contributions tax on money that should have sailed in untouched.
The rest of the money needs an address: personal name, family trust, investment bond or super
Whatever does not go into super has to live somewhere, and the address determines the tax rate for decades. In your personal name at the top marginal rate, earnings can lose nearly half to tax every year. A family trust lets income flow to family members on lower rates, though the rules around trust distributions are tightening. An investment bond taxes earnings internally at a maximum of 30 per cent and, held for ten years, pays out with no personal tax at all, which mainly appeals to owners already facing the top rate with their super options exhausted. And for larger balances, super’s advantage now tapers: balances above $3 million attract an additional 15 per cent on part of their earnings under Division 296, which belongs in the modelling before you decide how much to contribute.
There is no single right address. A 58 year old planning to stop work at 60 answers this differently from a 45 year old selling one business to fund the next, because access matters as much as tax. The point is that the question deserves the same rigour as the sale itself, and it has a deadline.
The sale price is a fact by the time the contract is signed. What the money does for the next 30 years is still a set of choices, and most of them expire within a year of settlement. Put your accountant and your adviser in the same room before the contract is signed, not after the money lands, and make the choices while they are still open.
This article is general information only and does not take into account your objectives, financial situation or needs. Consider whether it is appropriate for you and seek personal advice before acting. Build MyWealth (Accounting Cloud Pty Ltd) is a Corporate Authorised Representative (No. 1306106) of Lifespan Financial Planning Pty Ltd, AFSL 229892.
