Selling your business: the structural decisions that matter two years out, not two months

Technically reviewed 8 October 2026 · General information only, not personal advice. Read our disclaimer.

Every accounting firm in Australia publishes the same article in late May. Five EOFY tax tips. Maximise your super contributions. Prepay your interest. Bring forward deductions. The article is fine, the tips are fine, and the timing is fine for the audience it’s written for, which is people doing their tax return for the year that’s about to end.

It’s the wrong article entirely for someone planning to sell a business.

The decisions that move the needle on a business sale aren’t decisions you make in the year of the sale. They’re decisions you make 24 to 36 months out, while you’re still operating, while the sale is still hypothetical, while the choices are still open. By the time you’re in the year of sale, most of the doors that matter have already closed. The “EOFY tax planning” conversation in the year of sale is the consolation prize. The real game has already been played.

This is the article we wished someone had handed our clients three years before they came to us. If you’re thinking about selling your business in the next two to five years, this is your timeline.

A note before we start. The framework below is timing-focused. The technical detail behind each decision sits in other pieces (the small business CGT concessions walk-through, the Pty Ltd vs trust decision, the Section 100A piece). This piece is about when each decision needs to be made for the payoff to be available.

The transaction year matters. This article explains the decisions to work through, but a later sale may be calculated under different rules: from 1 July 2027 the general CGT discount ends for individuals and trusts and a minimum tax on capital gains begins. Our dated reform note explains the changes and the transition. We use the rules relevant to your transaction, not an old headline rate.

What “structural” actually means here

When I say “structural decisions,” I’m not talking about EOFY tweaks. I’m talking about the decisions that change which CGT concessions are available to you, what your eventual marginal rate on the gain looks like, and how much of the proceeds end up in your hands rather than the ATO’s.

The big ones are:

• The structure that holds the business (Pty Ltd, trust, sole trader, partnership)
• Whether the asset itself qualifies as “active” under the relevant test windows
• Whether the right people are positioned as significant individuals or CGT concession stakeholders
• How the operating business and the underlying assets (premises, IP, goodwill) are separated
• How owner remuneration and family group income have been distributed in the run-up
• Whether superannuation has been used as an absorbent for capital where the rules allow

Each of these is a multi-year decision. None of them can be retrofitted in a hurry without cost.

At 24+ months out: the decisions that have to start now

These are the decisions that need 24 months or more of runway. If you’re at this distance from a sale, this is the conversation to have.

Structure. If your business is in a Pty Ltd and a sale would benefit from the business being held in a trust (because of the general CGT discount on gains accrued to 30 June 2027, or the stronger run at the small business CGT concessions), the question is whether the structure can be changed in time, and whether it should be. The path depends on what you’re moving from: Division 615 of ITAA 1997 covers unit trust → company restructures and company → company interpositions, and Subdivision 124-N covers unit trust → company at the asset level. For a discretionary trust SME, the typical case, neither of those applies. The relevant path is the Small Business Restructure Rollover under Subdivision 328-G ITAA 1997, which can move active business assets between structures where the SBE test is met, ultimate economic ownership is preserved (typically via the family trust election), and the genuine restructure test is satisfied. The conditions are tight, the legal cost is real, a family trust election is hard and expensive to unwind once made, and one condition deserves its own sentence: the rollover is for a genuine restructure of an ongoing business. A restructure undertaken in preparation for a sale is generally not one, and starting it two years early does not change that. Two years is a useful planning window, not a waiting period in the tax law. Starting early gives us room to compare the options; it does not make every restructure eligible for relief. The months below are our planning horizons, not statutory deadlines: some restructures still land inside 12 months, others need longer, and eligibility turns on the rollover, duty, ownership and anti-avoidance conditions rather than the calendar.

Active asset positioning. The active asset test under Subdivision 152-A requires the asset to have been used in carrying on a business for at least half the ownership period (or 7.5 years if owned more than 15 years). If the asset has been leased out, held passively, or used non-commercially for parts of the ownership period, the percentage of “active” time matters. (One trap worth flagging: an asset held mainly to derive rent is excluded from “active asset” status under s 152-40(4), so commercial property leased to unrelated tenants doesn’t qualify, regardless of how long it’s been held.) Where the test is borderline, getting back to active use, or restructuring how the asset sits, can move the eventual outcome from “not eligible” to “fully eligible.” That timing window only opens if you start 24+ months out.

Significant individual positioning. If a sale is via shares or trust units, the seller has to be a significant individual or a CGT concession stakeholder of one. For a discretionary trust, a person’s small business participation percentage depends on the distributions of income and capital actually made in the relevant year, so in most cases the sale-year distributions decide it. The 15-year exemption is the exception: it needs a significant individual for at least 15 years in total, so a long history of how the trust has distributed matters there. Either way, the time to look at the pattern is now, not in the month of the contract.

Family group income smoothing. Owner wages, trust distributions, dividend timing, all of these affect the marginal rate that will land on the eventual gain (where the gain flows to an individual). They also affect superannuation cap headroom for the years leading up to sale. We’ve seen owners pay materially more tax on a sale because they hadn’t been smoothing for the previous three years.

Goodwill and operating-vs-holding separation. If your operating business and your premises sit in the same entity, the sale process becomes lumpier. A pre-sale separation, operating business in one structure, premises in another, related-party lease between them, can substantially clean up the eventual transaction structure and the CGT outcomes. Doable in 24 months. Often not doable in 12.

At 12 months out: the decisions that are still in play

Some doors close between 24 months and 12 months. Some don’t. Here’s what’s still possible.

Superannuation strategy. Concessional contribution caps and non-concessional caps still have headroom in the final year. If you have substantial unused concessional cap headroom from prior years (under the carry-forward rule in s 291-20 ITAA 1997, which lets you stack unused cap from the prior 5 years on top of the current-year cap of $32,500 for 2026-27, up from $30,000, where your total super balance was under $500,000 at 30 June of the prior year), the year before sale is often, not always, the year to use it. We compare contributions before the sale with contributions in the sale year: the better answer depends on the income in each year, the available cap and the relevant super balance, and a useful deduction is not a reason to put away cash you still need. The reason the pre-sale year is often the answer is mechanistic: the carry-forward rule requires your total super balance to be under $500,000 at 30 June of the previous financial year. Sale proceeds sitting in your bank account do not count towards total super balance; what moves it is money contributed into super and growth on what is already there. The point is that once you start contributing the proceeds, your balance at the next 30 June can pass $500,000 and the carry-forward door closes behind you. So using the accumulated cap in the year before sale, while the balance is still under the threshold, is often the only window that exists. The other pre-sale super move that gets missed is the CGT cap: amounts covered by the small business 15-year exemption or retirement exemption can be contributed under a separate lifetime cap that sits outside the ordinary non-concessional limits, provided the paperwork is lodged before or with the contribution.

One counterweight worth knowing about. For high-income earners (combined income plus concessional contributions over $250,000), Division 293 of ITAA 1997 imposes an additional 15% tax on the concessional contributions. The contribution still beats the 47% top marginal rate, but the headline saving narrows once Division 293 is applied. Owners thinking about pre-sale super top-ups should run the calc with Division 293 in mind, not just the headline 15% contributions tax.

Retirement exemption planning. If you’re under 55, the small business retirement exemption requires the exempt amount to be paid into super. That has cap consequences. Working out which beneficiaries can actually use the retirement exemption, with which super arrangements, requires planning, but the planning itself is doable in 12 months.

Active asset shift. If the asset is borderline-active, moving the use back to active, or restructuring the lease arrangements, can still meaningfully help even at the 12-month mark, but the runway is tight. We’d want to be working on this immediately at the 12-month flag.

Owner remuneration. Reducing owner wages in the year before sale (if the structure permits) to reduce taxable income in the sale year is a small but material lever. Not usually worth a structural change, but worth deliberate attention.

What is usually harder at 12 months: structural rearrangement involving asset transfers across entities, because the rollover conditions, duty and the connected-entity and affiliate position all need time to settle. Harder is not impossible. Already speaking to a buyer? There may still be useful decisions to make. The important thing is to understand them before you sign, not to assume the opportunity has gone because a calendar says you started late.

At 6 months out: the moves that are still real, and the moves that aren’t

Six months is when the conversation gets harder.

The moves still real at six months: super contribution timing within the year, the timing of the sale itself across financial years (if there’s flexibility on that), and the planning around how proceeds will be distributed if a trust is involved. The Subdivision 152 concessions are still applicable if you qualify, but you can no longer materially change whether you qualify, the qualifying tests are essentially set in concrete by what’s already happened.

The moves no longer real at six months: structural change, active asset re-positioning, significant individual repositioning. If you needed any of those and didn’t start, the eventual sale will be taxed at the position you actually have, not the position you might have engineered with more notice.

This is the conversation we hate having. You walk into our office with a Letter of Intent in hand, six months from settlement, and we have to tell you that the position you’re actually in is materially worse than the position you could have been in if you’d come and seen us two years earlier. The conversation isn’t theoretical, we’ve had it three times this year already.

At two months out: almost nothing

By the time you’re two months from settlement, the tax planning conversation is largely a documentation exercise.

We can make sure the calculations are right. We can make sure the concessions you do qualify for are properly claimed. We can work with your lawyer on the tax settings that need to be reflected in the sale documents, which the lawyer prepares. We can advise on the timing of the contract, remembering that for an ordinary sale the CGT event happens when the contract is signed, not when it settles, and on which financial year the gain lands in. None of that is nothing, done well, it’s worth a meaningful number, but it’s executing within constraints that have already been set.

Some of the doors that mattered closed two years ago.

The article every firm publishes in May is for people lodging tax returns. The article you needed is the one we’d have written for you in May 2024 if you’d told us you were thinking about selling.

What we’d actually do at month 24

If you came to us today with a sale in mind for 2028, the conversation we’d have starts with a structure review and ends with a written 24-month plan. The structure review answers the four basic conditions of Division 152, Small Business Entity status, Maximum Net Asset Value, active asset positioning, significant individual analysis, at the position you’re in today, and again at the position you could be in by sale date if the right moves are made now. The 24-month plan sequences the moves: which structure changes start in month 1, which trust resolutions need cleaning up by 30 June this year, which super strategy starts now, when the operating-vs-holding separation happens, when the active asset position is locked in.

That plan isn’t a sales document. It’s the operational document we use with the client over the next 24 months. We update it every quarter. We track each decision against its deadline. We make sure that when the sale comes, the position you’re in is the position we engineered, not the position the year-end happened to leave you in.

If you’re at 24 months from a sale, ring us. The conversation isn’t urgent in the EOFY sense, it’s urgent in the structural sense. Every quarter that passes without the structural plan in place is a quarter of optionality you can’t get back.

If you’re at 12 months, ring us anyway. Some doors are still open. We’ll tell you which ones.

If you’re at six months, ring us today. The conversation is harder but it isn’t useless.

If you’re at two months, ring us, and we’ll do what we can with what we have.

The right time was 24 months ago. The second-best time is now.

Raise higher.