Our client had recently put their commercial rental property on the market and assumed that the sale would attract a significant capital gain (and subsequent tax liability) of over $1m.

The Value of Asking the Right Questions

After asking numerous questions and digging deeper, we were able to determine they had previously used the property in a related party business operation and having held for more than 15 years (with more than 50% being used in their business) they would in fact be eligible for small business CGT concessions. On the basis the client was comfortable with contributing some of the gain into their Self Managed Super Fund, our advice was that the tax liability for this transaction would be $nil.

The Process

We assembled a checklist of documentation required and worked with the client to gather the relevant evidence to access the concession under the CGT Retirement Exemption. A timeline was created and communicated with the client to ensure they were aware of funds required to be paid into their SMSF and when these monies would be due for payment.

Achieving Long-Term Goals

A follow-up meeting with the client uncovered further opportunities for the client. Discussion was centered around their long-term plan to invest in more property for their business and eventually live off the passive income this would generate. Given the recent injection of funds from their earlier property sale, their age, and stage of life this couple were at, in conjunction with their financial planner, the structuring advice suggested they consider acquiring the property in their SMSF. This completed a long term goal of theirs and secured a property for the continued success of their business.