Tom has been owning and running a business in an accounting firm in Lidcombe. He is the principal accountant, and he has other 3 administrative employees and 2 accountants.

This business is a large office and was purchased in 10/2006 for $200 000. Tom bought it with his savings and a gift from his parents.

Tom purchased a new office on 17/2/2020 adjacent to the first office expanding as he thought the business needed more staff and space. He bought the new one at the cost of400 000. He borrowed money from Commercial Bank with an interest rate of 7%. Tom accepted that the current tenant in the new office is able to stay until the expiry date of the original lease term ( 12/2020) as he doesn't need the space immediately. The current tenant pays 2 000 weekly which is used to repay the bank loan.

 
The tenant moved out in the middle of December, the new office was restructured with planning to hire more staff. However, just before posting the advertisement for hiring (01/2021), Tom got sick and have top stayed in the hospital; for 1 week.After that, he cannot return to work full-time because of his health condition. Therefore, he sold his business and current house near that office, move back to his hometown where he grew up. He was 52 at that time.

The house is purchased with 1.2Mil in 10/1996 and sold with 3.2mil in 03/2022Business include:

Office in Lidcombe: 450,000

New office: 550,000

Goodwill: 350 000

Equipment and furnishment 50 000

The business's turnover was 2.1 Mil. Tom also entered into contract to agree that he will not open a new office in the accounting firm in distance of 10 km for next 3 years.

At the time he sold his business, he also sold his shares in BHP for 300, 000. BHP is a real estate firm company in Sydney. Tom owns 20% of BHP. Remaining 80% of share is owned by Sam who is his ex wife and director. They divorced in 2016. This 20% of share has been remaining since 2010 when the BHP is established. The asset of BHP is 3.8 Mil. Turnover of BHP in financial year 21/22 was 1.6Mil

1. Giving advice for Tom about gains tax consequences. (support relevance legislation, case law and tax ruling)

2. Giving advice for Tom of Taxation consequences if he invest 600 000 from the asset disposals to super fund. He has not made any investment to his fund since 2019. His super account balance is 1.4Mil