For business assets acquired before 21 September 1999, one overlooked strategy may significantly increase super contribution capacity.
Standard Approach:
Most taxpayers automatically use the 50% general CGT discount.
Alternative:
Eligible individuals may instead elect the indexed cost base method.
Why This Could Help:
Although indexed cost base often results in a larger taxable gain, it may also:
- Increase retirement exemption amounts
- Boost Lifetime CGT Cap contributions
- Create larger retirement savings opportunities
Strategic Lesson:
A “worse” CGT outcome may sometimes create a “better” super outcome.
Selling a Long-Held Business Asset?
The choice between the general CGT discount and the indexed cost base method may have significant implications for both tax outcomes and future super contribution opportunities.
In some cases, a strategy that increases taxable capital gains may also create larger Lifetime CGT Cap contribution opportunities and improve long-term retirement outcomes.
Contact us today to discuss your business sale and retirement planning options.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.