William Buck director Anna Carrabs said that in her experience, 70 per cent of the business owners who satisfy the capital gains tax (CGT) small business concessions are unaware of the opportunities to place substantial funds tax-free into super.
“Eligible individual business owners may be entitled to place up to $1.35 million into a super fund tax-free when this business transaction occurs, while joint couple owners can deposit up to $2.71 million,” said Ms Carrabs.
She noted, however, that super contributions from a business sale using CGT small business concessions need to be made prior to the age of 75.
Contributions under these concessions, she said, also need to be made by the later of 30 days after the capital proceeds are deposited, or when the tax return is lodged the year the business sale occurred.
“Many business owners focus solely on the sale and fail to review where the funds should be placed post-sale to ensure the best position for their retirement,” she said.
Ms Carrabs said super is one of the most tax-effective structures that can be utilised to ensure a strong financial future and stressed the importance of business owners planning ahead, particularly when approaching the age of 75.
“Business owners should seek advice from a super expert who understands their personal circumstances to gain the greatest financial advantage when selling a business,” she said.
“Many business owners cannot capitalise on super tax advantages because they find out about them too late.”