Bob sold his consultancy business in May 2018 and he wants advice about his possible capital gains tax liability in light of the following Bob started his business in 2005 when he purchased a building freehold for $800,000 and he has carried on his business continuously in this building since then until the business was sold in May 2018 In May 2018, at the time the business was sold, the amount owing on a business loan for the business was $1,500,000 The business has had a current annual turnover of $2,900,000 (excluding GST) This figure has remained virtually the same over the last 3 years Bob sold his business for $6,500,000 (excluding GST) Of this $6,500,000, $4,000,000 relates to the building and the remaining $2,500,000 relates to other business assets including business goodwill The tax adjustable value of the business plant and equipment at the time of the business sale was $500,000 and $500,000 of the $2,500,000 shown above for the other business assets is allocated to the sale of this plant and equipment at the tax adjustable value The remaining $2,000,000 was allocated entirely to the business goodwill Bobs wife, Lucy, owns and carries on a florist business, in her own name, which has total net assets of $250,000 Bob and Lucy consult each other regularly about the decisions concerning the running of both businesses Bob owns a portfolio of shares with a current market value of $240,000 Bob also holds 35 of the shares in RWZ Pty Ltd, a private company that owns and runs a catering business The total net assets of RWZ Pty Ltd have a fair market value of $1,000,000 Bob is also a beneficiary in the Bob and Lucy Family Trust and he has only received distributions from this Trust in the previous 4 years, as follows $3,000 in 2015 (when the Trust had tax net income of $10,000) and $5,000 in 2016 (when the Trust had a tax net income of $15,000) The net assets of the Trust as at May 2018 were $400,000 Bob also estimates that 25 of his home is used for his business and that the home is presently worth $800,000 Bob currently has a loan of $200,000 for the home Bob is aged 52 and he may buy another business in the future Required Provide advice to Bob on what his net capital gain is likely to be, after applying any relevant discounts and concessions for which he may be eligible

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Bob sold his consultancy business in May 2018 and he wants advice about his possible capital gains tax liability in light of the following: Bob

Bob sold his consultancy business in May 2018 and he wants advice about his possible capital gains tax liability in light of the following:

Bob started his business in 2005 when he purchased a building freehold for $800,000 and he has carried on his business continuously in this building since then until the business was sold in May 2018.
In May 2018, at the time the business was sold, the amount owing on a business loan for the business was $1,500,000.
The business has had a current annual turnover of $2,900,000 (excluding GST). This figure has remained virtually the same over the last 3 years.
Bob sold his business for $6,500,000 (excluding GST). Of this $6,500,000, $4,000,000 relates to the building and the remaining $2,500,000 relates to other business assets including business goodwill.
The tax adjustable value of the business plant and equipment at the time of the business sale was $500,000 and $500,000 of the $2,500,000 shown above for the other business assets is allocated to the sale of this plant and equipment at the tax adjustable value.
The remaining $2,000,000 was allocated entirely to the business goodwill.
Bobs wife, Lucy, owns and carries on a florist business, in her own name, which has total net assets of $250,000. Bob and Lucy consult each other regularly about the decisions concerning the running of both businesses.
Bob owns a portfolio of shares with a current market value of $240,000.
Bob also holds 35% of the shares in RWZ Pty Ltd, a private company that owns and runs a catering business. The total net assets of RWZ Pty Ltd have a fair market value of $1,000,000.
Bob is also a beneficiary in the Bob and Lucy Family Trust and he has only received distributions from this Trust in the previous 4 years, as follows: $3,000 in 2015 (when the Trust had tax net income of $10,000) and $5,000 in 2016 (when the Trust had a tax net income of $15,000). The net assets of the Trust as at May 2018 were $400,000.
Bob also estimates that 25% of his home is used for his business and that the home is presently worth $800,000. Bob currently has a loan of $200,000 for the home.
Bob is aged 52 and he may buy another business in the future.

Required

Provide advice to Bob on what his net capital gain is likely to be, after applying any relevant discounts and concessions for which he may be eligible.