Business Advisory Accounting & Tax

Keeping It in the Family: Transferring Your Business the Smart Way

3 min read

29 July 2025

Take outs:

Transferring a business to family members involves more than just a handover—it may require restructuring, such as changes to trusts, partnerships, or shareholding, all of which have legal and tax implications.
Thorough documentation is essential—recording asset acquisition dates, valuations, and structural changes helps ensure tax compliance and smoother succession.
Tax triggers like Capital Gains Tax and GST can be significant—even gifts or internal transfers can be treated as disposals by the ATO, leading to unexpected liabilities.
Pre-CGT assets need special care—transferring or restructuring them may affect their tax-exempt status, so professional advice is crucial to avoid costly mistake

Keeping it in the Family: Transferring Your Business the Smart Way

So, your business has grown, your kids have grown—and now you’re thinking it’s time to start handing over the reins. Maybe it’s your daughter who’s been running operations for the past few years, or your son who’s shown a knack for numbers and wants to step into a leadership role.

Whatever the case, transferring your business or wealth to family isn’t just a handshake and a farewell. It’s a serious move with legal strings and tax implications—and if done right, it can secure your legacy while keeping the ATO off your back.

This Is Not a Back-of-the-Napkin Job

Family succession might feel personal, but it's all business when it comes to tax. Transferring control of your business often means you’ll need to restructure. That could include:

• Tweaking the shareholding setup
• Changing the trustee or beneficiaries in a trust
• Altering a partnership agreement
• Setting up a new trust or entity and shifting assets into it

And each one of these changes? It has tax consequences. Serious ones.

The Golden Rule—Document Everything

This is where many business owners get caught out. If you’re restructuring, transferring assets, or changing control in any way, you need to keep meticulous records:

• When assets were acquired
• What they cost
• Any improvements made
• How you valued them

Why? Because when the time comes to file your tax return (or defend your position if questioned), clear documentation can mean the difference between a smooth handover and a tax-time nightmare.

Beware the Tax Triggers

Let’s talk Capital Gains Tax (CGT). Even if you're gifting the business to a family member, the ATO may still treat it like a sale—and expect its share. And if your business owns property, equipment, or other high-value assets, GST could also come into play.

There’s also a hidden trap: pre-CGT assets. If you acquired the business (or key assets) before 20 September 1985, they may be exempt from CGT. But changing ownership - even to your kids - could strip that exemption away. Get advice before you move.

A Family Business Handover in Action

Let’s say you started your business 30 years ago. It was a single café, and now it’s a multi-location hospitality group. One of your sons works alongside you, and you’ve started thinking about retirement.

You sit down with your accountant, who recommends restructuring the business into a family trust. This gives you the flexibility to pass control gradually while retaining oversight. You update your succession plan, document all the tax considerations, and make sure everything is correctly lodged with the ATO.

Now, instead of stepping away cold turkey—or accidentally triggering massive tax bills—you’re easing out, preserving value, and protecting your family’s future.

The Bottom Line: Don’t Wing It

Transferring your business to family is one of the most meaningful things you can do as an owner. But it’s also one of the most complex from a tax point of view.

Don’t leave it to chance. Work with advisers who understand both your family dynamics and the tax landscape. With the right planning, you can retire with peace of mind, knowing your business—and your legacy—is in good hands.

Need help making the transition?

At Kelly+Partners, our team of experts specialise in helping business owners like you structure handovers that work for both family and the future. Speak to us today to find out more on how we can assist you.

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