A presentation for medical professionals to discover how to make the most of their finances throughout their career. For more information, visit www.goodingpartners.com.au

1. Speaker:
The Tax Life Cycle of a
Medical Professional – Part 2
Brett Beaver
Associate Partner
Gooding Partners Chartered Accountants

2. PLEASE
SWITCH
MOBILE
PHONES
OFF OR
SILENT
FRIENDLY REMINDER:

3. Disclosure Statement
The information presented in this presentation is for general
guidance only. It is essential to take professional advice on
specific issues and their impact on any individual or entity. No
liability can be accepted for any errors or omission or for any
person acting or refraining from acting on the information
provided in this presentation.

4. Outline of the session:
 General business management
considerations.
 Maximising business value for sale.
 Minimising capital gains tax and income tax
on sale.

5. Your operational…
Business management phase
(a slight diversion from tax!)

6. General business considerations
 Budgeting and cash flow analysis;
 Maintaining accurate and timely management
accounts;
 Maintaining adequate insurance cover;
 Financing or refinancing – speak to your advisor!
 Be mindful of tax elections such as Family Trust
Elections and Interposed Entity Elections;
 Continue to review your asset protection strategies.

7. Embracing the twilight years…
Maximising business value for sale

8. Matters to consider prior to sale
 Speak to your advisor and plan;
 Get your “house in order”;
 Consider your opportunities to increase value;
 Do it now and don’t wait!

9. What are you selling?
 Selling your business?
 Selling your equity in a business structure?
 This will determine how your Practice is packaged
and sold.
 Each option can result in varying tax consequences.

10. Sales contract considerations
 I am not a lawyer…
 Have your lawyer provide legal opinion on the
contract;
 Your tax advisor should also review to flesh out tax
consequences of sale;
 Consider your opportunities to increase value;
 Practical contract considerations.

11. Minimising capital gains tax
and income tax on sale

12. Stock, Consumables and P&E
 Allocation of the sale price;
 Non-capital assets will generally include stock,
consumables and Plant and Equipment;
 Generally subject to income tax;
 Must deal at arm’s length.

13. Capital Gains Tax – brief overview
 20 September 1985;
 Assets acquired pre-20 Sept. 1985 may retain
pre Capital Gains Tax (CGT) status;
 A capital gain is generally the difference between
the sale price received and the amount you paid for
the asset.

14. General CGT Discount
 Available to individuals, trusts and superannuation
funds;
 50% General CGT Discount for individuals and
trusts;
 1/3rd
General CGT Discount for superannuation
funds.

15. Small Business: $2m Test
 A small business entity is an individual,
partnership, company or trust that:
 Is carrying on a business; and
 Has less than $2m aggregated turnover
 Methods to calculate turnover;
 Planning point.

16. Small Business:
Maximum $6m Asset Test
 Assets of the business and related entities must be
less than $6m;
 Asset definition is wide, but consider liabilities,
including provisions;
 Excluded assets;
 Planning point.

17. Small Business:
other basic requirements
 The “basic conditions” of the small business
concessions are:
 You are a small business (i.e. meet the $2m
Turnover or Maximum $6m Asset tests)
 A Capital Gains Tax Event must occur
 There must be a capital gain
 The asset being sold must be an “Active Asset”
 Additional requirements if the asset is a
share in a Company or unit in a Trust.

18. Small Business: 15-Year Exemption
 This concession allows you to completely disregard
the gain;
 Various conditions to qualify for the retirement
concession;
 Under 55 – must be paid into your Super;
 Over 55 – you keep the proceeds;
 Planning point.

19. Small Business:
50% Small Business Reduction
 This concession allows you to further reduce the net
capital gain by 50%;
 To qualify, you only need to meet the “basic
conditions”;
 Essentially reduces the taxable capital gain by 75%.

20. Small Business:
Small Business Retirement Exemption
 No retirement necessary!
 Various conditions to qualify for the retirement
concession;
 Lifetime cap of $500,000 per person;
 Planning point.

21. Small Business:
Small Business Rollover Relief
 Does not reduce a capital gain, simply defers it to a
later date;
 Only the “basic conditions” to be satisfied, along
with the acquisition of a replacement asset within
the “replacement period”;
 Replacement asset to be an active asset;
 Planning opportunity.

22. Summary
 Be prepared and plan for sale;
 Seek appropriate legal and accounting/tax advice;
 Deal at arm’s length;
 Be aware of the tax consequences on sale of your
practice.

23. Any Questions?