ATA wants CGT removed from intra-family business transfers

Industry calls on Productivity Commission to help make business regulations less punitive and more user-friendly

ATA wants CGT removed from intra-family business transfers
Stuart St Clair is critical of the burdens on family businesses.


The Australian Trucking Association has urged the Productivity Commission press for abolition of capital gains tax (CGT) on business transfers within family businesses.

The change is amongst recommendations in the ATA’s submission to the Productivity Commission inquiry into business set-up, transfer and closure.

"Family businesses are the heart of Australia’s trucking industry," ATA CEO Stuart St Clair says.

"Previously, family businesses were able to use arrangements such as trust cloning to avoid triggering a capital gains liability when transferring ownership of the business within the family. However, this was abolished in 2008.

"The intent of business taxes is to collect revenue in the simplest way possible, without preventing businesses from increasing employment and contributing to economic growth.

"CGT on family businesses works against this. When a parent passes on their business to their children, they receive no benefit.

"The children could be liable if they chose to sell the business outside of the family, as they then benefit financially from the sale. But a change of company ownership within a family should not attract CGT."

The ATA argues business compliance and intergenerational business transfers are overly complicated and have a chilling effect on desire for such moves while leaving such smaller operations vulnerable to risk and uncertainty.

The ATA also calls for:

  • small business turnover threshold to be lifted to $3 million and the feasibility of an increase to $5 million to be investigated
  • payroll tax rates to be harmonised across jurisdictions and a central administrator to process the tax
  • The Productivity Commission should investigate further the effect of stamp duty on business and recommend ways to alleviate its effect on business growth
  • amending Australian Business Number (ABN) arrangements to allow individuals to register for an ABN with the intent of carrying out an enterprise, as a way of reducing red tape on start-ups 
  • the Australian Taxation Office to investigate simplifying business activity statements (BAS)
  • the Productivity Commission to investigate the Board of Taxation’s review of Division 7A in order to allow family trusts to allocate funds in an efficient manner
  • amending the Code of Banking Practice and the Mutual Banking Code of Practice to allow a standardised notice period for notifying business borrowers of changes to loan terms and conditions.

The submission can be seen here.

You can also follow our updates by joining our LinkedIn group or liking us on Facebook