Home – New Forums Money matters Capital Gains Tax on Website Sale?

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  • #986355
    Siesta Hammocks
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    Question for all you accountants and tax professionals here.

    I’m potentially selling a website I own if I get the right price that I’m after.

    I have a Pty Ltd company, and the website domain is held by this entity.

    My question is how much CGT would I be likely to pay considering I’m a small business (only me and turnover is about $75K a year) and the company has owned the asset for less than a year?

    I’d obviously like to pay as little CGT on it so any advice on ways I can minimise this would be very helpful.

    Thanks,
    Aaron.

    #1157403
    James Millar
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    Hi Aaron

    Yes it sounds like CGT will be imposed on the transaction event. Was there much of a cost base incurred in the development of the website / business being sold (this will reduce any gain)? Also worth noting that even if the period of ownership was more than 12 months, companies are not eligible for the general 50% CGT discount.

    Depending on the nature of the website – if its actually running a business of some description then you may also be eligible for the small business concessions. The only issue being that you will need to undertake a members voluntary liquidation to extract the concessional amount as a liquidators distribution rather than a conventional unfranked dividend (which would be fully taxed). That will set you back between $2500 and $5000. In most cases the tax benefits well and truly exceed the cost of the exercise.

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
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