Small Business CGT Concessions: Plan Before You Sell a Clinic

Reckon published a small business article this week on CGT carve outs and exemptions.

For physio clinic owners, this is a timely reminder.

If you may sell your clinic one day, do not wait until the buyer appears to think about capital gains tax.

By then, it may be too late to fix the basics.

What CGT means in plain English

CGT stands for capital gains tax.

It can apply when you sell an asset for more than its cost base.

For a physio clinic, that might include:

• selling the clinic business
• selling shares in the company that owns the clinic
• selling a clinic property
• selling part of the business to another owner

The tax result depends on the asset, the owner, the structure, the records, and the timing.

Why planning matters early

Small business CGT rules can be helpful in the right case.

But they are not automatic.

You may need to meet tests. Your structure may matter. Your records may matter. Timing may matter too.

That is why a sale should not start with a quick guess about tax.

It should start with a review.

Check who owns what

Many clinic owners are not clear on this point.

Ask:

• who owns the clinic business?
• who owns the equipment?
• who owns the lease or property?
• is there a company, trust, or sole trader setup?
• are there loans between the owner and the business?

These details can change the tax outcome.

They can also change how easy the sale is.

Keep clean records

Poor records can make a sale harder.

Before you sell, a buyer may ask for profit reports, payroll records, lease details, equipment lists, and tax records.

Your accountant will also need records to work out the tax position.

Start with the simple things:

• up to date accounts
• clear equipment list
• lease documents
• company or trust records
• past tax returns
• sale and purchase documents for major assets

Do not leave this until the week before due diligence.

Think about timing

The timing of a sale can matter.

So can the timing of business changes before a sale.

For example, bringing in a new owner, moving premises, buying major equipment, or changing from sole trader to company may all affect the picture.

That does not mean you should avoid change. It means you should get advice before you make big moves.

What to do if sale is a maybe

You do not need a signed deal to start planning.

If you think you may sell in the next few years, ask your accountant for a pre-sale tax check.

A good check should look at structure, records, likely tax issues, and what should be cleaned up now.

Selling a clinic is a big step. A simple tax review early can save stress later.

Source: Reckon, “CGT carve-outs and exemptions for small business and startups”.