On 1 April 2018 Adam entered into a contract to purchase the following:

• A retail store premises (for a store that sells camping gear) – for $650,000

• The goodwill attached to the camping store – for $300,000. After purchasing the retail store, Adam continued to run it as a store selling camping gear, trading under the name “Happy Campers”. During February 2019, Adam spent $50,000 on renovating the store premises. In February 2023, Adam, now 53, decided he was ready for early retirement. As a result, on 12 February 2023, he entered into a contact to sell the business to Jane. The details of the contract were as follows:

• The store premises was to be sold for $1 million.

• The goodwill attached to the store was to be sold for $500,000.

• Adam was not to operate a competing store within 2 km of the store being sold for the next 3 years – the purchaser (Jane) paid him $150,000 for this. • Trading stock of the store was to be sold for $100,000 (this had a cost of $90,000).

• The kitchen table, chairs and other office furniture in the staff room were to be sold for $15,000 (they had cost $10,000). For the time Adam owned the store, annual turnover was consistently over $3.5 million. At the time of the 12 February 2023 agreement, Adam owned the following assets: • A main residence in Burwood East worth $1.4 million.

• 25% ownership of a company, JK Pty Ltd. The total market value of JK Pty Ltd was $600,000.

• 80% ownership of a company, SW Pty Ltd. The total market value of SW Pty Ltd was $500,000.

• Shares in CBA (Commonwealth Bank of Australia) worth $250,000.

• 50% share in an investment property in Keilor (Adam’s brother owns the other 50%). The total value of the property was $800,000. It had a $300,000 mortgage over it.

• Superannuation worth $150,000. 5

A few years ago, on 10 March 2018, Adam had purchased a house in Burwood East (mentioned above). The cost was $700,000, with stamp duty of $40,000 being payable. He immediately rented it out for two years. He then on 10 March 2020, when it was worth $900,000, moved into the house and from that time regarded it as his main residence for tax purposes. On 9 March 2023 he sold the house for $1.2 million. Advise Adam as to the CGT consequences regarding the 2022-23 tax year. In doing so please include a discussion regarding Adam’s ability to utilise the CGT Small Business Concessions for the 12 February 2023 agreement.

Please also include a discussion of the Net Capital Gain made by Adam for the 2022-23 tax year.