As they name suggests it is a business / investment entity that is owned and run by one individual. There is no distinction between the owner and the business / investments. It is the most common form of business / investment operation.
Advantages
- Easy to setup.
- Generally inexpensive to operate and maintain.
- Generally both income / revenue losses and capital losses can be carried forward.
- Able to access the 50% discount available.
- Small Business Tax Concessions are available.
- Capital Gains tax concessions available:
- 15 year exemption - had business for more than 15 years; over 55 then tax free upon sale;
- 50% active asset reduction - If the asset has been active you will be able to access a 50% discount;
- CGT Retirement exemption; and
- Rollover - If you sell a small business asset and buy a replacement or improve an existing one, you can defer the capital gain until a later year.
- Should you wish to terminate the business / investments this is relatively straight forward.
Disadvantages
- All the income and capital gains will be assessed in the owner's name.
- Minimal asset protection.
- Upon death the business / investments will pass to the individual's estate. Difficult for succession planning.
If you would like to discuss further please contact us:
McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
www.mcnamaraandcompany.com.au/contact-us
Phone +61 3 9428 1062
Email admin@mcnamaraandco.com
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