Question
Because of his wife's ill-health, Brian sold his gift shop and family home in Victoria and moved to WA on 20 June this year. Brian
Because of his wife's ill-health, Brian sold his gift shop and family home in Victoria and moved to WA on 20 June this year. Brian had acquired the vacant premises 10 years ago for $750,000 and established the business on that date. He sold the business on 20 May this year for a net consideration of $1,880,000. This was made up as follows:
Goodwill 440000
Trading Stock 60000
Fittings Shop 120000
Shop and land 1360000
Less debt taken over secured over stock and fittings (100000)
In addition, Brian received a further $20,000 for signing a contract not to open another business within a 10 km radius for the next five years.
The turnover of the shop for the previous financial year was $540,000. Brian's home is valued at $1.8m. He also has a 45% interest in a property development company which has assets of $5.4m. His wife also has a 5% interest in that company. The turnover of the property development company last year was $1.2m.
Question 1: Advise Brian of the tax consequences arising from the sale and
who is responsible for verification of client's document?
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