I have a question re: sale of sole trader business.
Is the profit of selling sole trader business (after taking into account of assets & property) a capital gains for the individual and is entitled to the 50% discount, or is the whole profit will need to be included as assessable income in business section?
Is the disposal of business assets (M/V & Equipment) a mere profit realisation or is it a capital gains?
Thanks
Hi @Zijien
The capital proceeds of the sale of a sole trader business, including goodwill associated to the business, is reported on the individual tax return.
It is assessable income under the capital gains section of the return (even though it is a capital gain from the business). And so long as the asset is eligible for the CGT discount, you can use that when calculating your net capital gain.
Cars and most business equipment are not capital assets. Because they're depreciating assets, instead of a capital gains event, you have a balancing adjustment to calculate instead. If the proceeds of selling each asset are more than its currently depreciated value, the difference is assessable business income. If the proceeds are less than the depreciated value, that's a business deduction for the difference
Hi @Zijien
The capital proceeds of the sale of a sole trader business, including goodwill associated to the business, is reported on the individual tax return.
It is assessable income under the capital gains section of the return (even though it is a capital gain from the business). And so long as the asset is eligible for the CGT discount, you can use that when calculating your net capital gain.
Cars and most business equipment are not capital assets. Because they're depreciating assets, instead of a capital gains event, you have a balancing adjustment to calculate instead. If the proceeds of selling each asset are more than its currently depreciated value, the difference is assessable business income. If the proceeds are less than the depreciated value, that's a business deduction for the difference
5 Nov 2025 · 6 min read time
22 Apr 2024 · 3 min read time
22 Apr 2024 · 6 min read time
3,144 views
1 replies