No point saving some tax if you create a cash flow crisis in the process. Tax planning these days falls into three baskets – health & hygiene, timing & efficiency, permanent savings.
As the business generates profits and cash, one of the questions you need to address is how much cash can I reasonably take out of the business. Tax and other issues overlay this and you want to make sure you do it as effectively as possible. Nonetheless the fundamental question is how much can we take out and how much should we take out? For some business owners the answer is as much as possible. For others they are content to let the business take its time. Irrespective of what your attitude is to this question you should consider it. You should know what your business should be producing and capable of returning to you. Whether you take it or not is another issue, but knowing how much you should be able to take is a key business measure.
A. Eligibility for the CGT small business concessions is tested at the time of the CGT event. This is when you sign the contract for sale of the business. If you are relying on the small business concessions to manage your capital gain then it makes good sense to have your position reviewed in advance of any sale. You should not attempt to do this yourself. You need to have your accountant or tax adviser complete this for you. The CGT rules are complex and the review should be completed by someone who fully understands all of the rules and how they will apply to your situation. They will need to have all of the facts available to test your position. Often people get caught out in this area because of small details that are over looked.
But many SMEs complete research and development work in their business without recognising that this is what they are doing. If your business is undertaking R&D work, then you could be eligible for additional tax concessions or even a cash refund from the Government. So, what’s holding everyone back?
We explore:
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