Planning for the future: Retirement planning tips for small business owners

Many small business owners forfeit their superannuation and retirement funding to re-invest in their business, and as a result may find a lot of their retirement wealth caught up in their business value. If you are a business owner approaching retirement, it is especially important to maximise the value of your business upon sale so that the proceeds can be used to fund your future.

Often, the two biggest areas of concern for business owners during business exits are;
•    Maximising their sale value through appropriate tax strategies; and
•    Structuring and investing the proceeds in the most appropriate way for future business or retirement.

There are a number of concessions available to eligible businesses which can maximise the sale value of the business, resulting in more money in your pocket. If you qualify for the concessions it can make a significant impact on your sale proceeds and in some cases it can reduce the capital gains tax to zero. Retirement planning can also mean minimising your tax moving forward. 

Small business capital gains tax (CGT) concessions
Small businesses have access to a range of tax concessions, particularly on sale. This applies to sole traders, partnerships, companies or trusts. 

Small business CGT concessions that may apply to your business include:
•    50% CGT discount
•    15-year asset exemption
•    50% active asset reduction
•    Retirement exemption
•    Roll-over (to next business).

To qualify for the small business CGT concessions, you must satisfy several conditions that are common to all the concessions. These are called the ‘basic conditions’ and are released by the Australian Tax Office (ATO). 

Each concession may also have further requirements you must satisfy for the concession to be eligible. There is also a $6 million maximum net asset value test that applies.

Superannuation & tax
Depending on your age, the retirement exemption can be used to negate taxation by rolling funds into superannuation. If you are aged over 60, using superannuation could mean no tax at all in retirement. 
Additionally, appropriate superannuation advice can ensure you are structured tax effectively not only for your retirement but also for your beneficiaries of your estate. 

Get the right advice
AB Phillips are financial planning experts and have over 40 years’ experience in helping individuals and businesses achieve their financial and lifestyle goals. Let us help you achieve your best business exit result now and in the future. We can work with your people or co-ordinate our team across financial services, taxation and insurance to take the headache out of your business sale. 

For more information on how we can help you manage your business risks, call us on 1300 242 136 or email    


While AB Phillips Pty Ltd has taken all due care in preparing the information for this update, it has not taken into account any particular persons objectives, financial situation or particular needs. The information provided is general in nature and does not constitute financial advice. Investors should, before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or particular needs. We recommend investors obtain financial advice before making any financial investment or insurance decision.