Selling a business and the Uniform Capital Allowance Regime
So you think you have a good lawyer do you? Last century, the sale of a business typically involved land and buildings, plant and buildings at written down value and goodwill. Intellectual property was usually thrown in for a nominal $1.
But we are now in the post industrial age. The true value of a business often lies in the IP, and since 2001, IP has been taxed under the Uniform Capital Allowance Regime – the depreciation provisions – not under the CGT regime.
Your lawyer needs to consider this when drafting the agreement. The sale of a business for $4m, fully attributed to copyright in a software program, could be subject to 46.5% tax rather than no tax at all under the CGT Small Business CGT Concession Regime (Division 152).
Choose your advisor carefully.