Can we structure our company to minimise CGT?
We are a family business and many members of our extended family are involved. We want to structure our company to avoid CGT impacts associated with holding and transferring shares. We would also like flexibility to distribute to different family members in different years depending in their individual tax situation.
Lawyer Answers (1): Answers from lawyers are general preliminary responses. They are not formal legal advice and cannot taken account of all your circumstances. They do not create a lawyer–client relationship.
- CGT implications will only come into play upon the sale of a CGT asset (the shares).
- As such the importance of this issue is dependent on your long term intentions for the shares that you own. If you do not intend to sell them then CGT may not be a large consideration.
- As for flexibility there are a number of flexible arrangements for operating a family business through a company structure to minimise taxes for the family group.
- Some of these arrangements include combining different structures to make use of the advantages of each.
- For example a family trust can be established and the trustee of the family trust could be the legal owner of the shares in the company.
- This would allow for CGT sharing among the group and for flexible distributions of profits to be made among the family group at the discretion of the trustee.
- You can find out more in our topic on Trusts.