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Identify the seller and what is sold
Write down the legal owner of each item being transferred. A shareholder selling shares and a company selling its business assets are different sellers undertaking different transactions. The commercial description “selling the business” is not enough to determine the tax treatment.
Use our asset sale versus share sale comparison to organise the structure discussion. Your tax and legal advisers need the actual proposed steps.
02 /
Break an asset sale into its parts
An asset transaction can include stock, depreciable property, goodwill and other rights. Different items can have different tax consequences. Ask your adviser to review the allocation of the purchase price and how it relates to the agreement and supporting evidence.
Keep the asset register, stock information and records of relevant costs available. Do not treat one headline purchase price as though every component receives identical treatment.
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Discuss GST and timing before signing
GST treatment needs its own review. A sale described commercially as a going concern does not automatically settle whether the tax requirements are met. Clarify the parties' circumstances and the wording needed in the agreement with your advisers.
Also ask when relevant income, expenses or adjustments arise, which returns will be needed and who will manage post-sale administration. Payment dates and tax dates are not necessarily the same.
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Build a complete proceeds discussion
Keep tax, debt repayment, transaction costs and any deferred payments visible when discussing the owner's next steps. Update the analysis if the structure, allocation or terms change. A previous estimate may depend on assumptions that are no longer true.
Our business tax advisory work connects these questions with valuation and ownership decisions. This guide is general preparation information; the treatment of your transaction requires advice on its facts.
Use this in your business
Questions to settle with your advisers
| Topic | Bring to the discussion |
|---|---|
| Structure | Seller, buyer and whether shares or assets are transferred. |
| Allocation | Draft schedule of the price allocated to each asset class. |
| GST | Registration, proposed treatment and agreement wording. |
| Timing | Settlement, deferred payments and relevant filing dates. |
| After the sale | Retained liabilities, final records and ongoing entities. |
A practical example
A revised asset list changes the question
A buyer may ask to exclude a vehicle or acquire stock separately after initial terms have been discussed. Update the asset schedule and ask advisers to revisit the allocation and treatment. The original tax discussion may have assumed a different package of assets.
Your next move
Discuss the tax questions before agreeing your sale
Share the proposed structure and draft terms with us before the detail becomes fixed. We can help identify the tax and commercial questions that need to be considered together.
Discuss the tax questions before agreeing your sale