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.
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.
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.
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.