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Modelling Small Business CGT Concessions in Voyant Australia

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Chelsea Steinmann
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Overview

The Small Business Capital Gains Tax (CGT) concessions are currently with our development team for future implementation in Voyant Australia.

At present, Voyant does not support directly modelling contributions of $2 million or more under these concessions.

In the meantime, advisers can use the following workaround to illustrate the potential impact of these contributions on a client's financial plan.

Step 1: Create an Investment Account

To replicate the tax environment of a pension account, begin by creating a new Investment Account.

  1. Navigate to Investments and add a new Investment Account.
  2. In the Type field, select Other Taxable.
  3. Set the Capital Gains Tax Rate to 0%.
  4. Set the Income Tax Rate to 0%.
  5. Give the account a recognisable name, such as Pension Account – CGT Concession.

Setting both tax rates to 0% allows the account to simulate a tax-free pension environment for modelling purposes.

Step 2: Set Up Planned Withdrawals

To replicate pension payments from the account:

  1. Locate the Planned Withdrawals section within the Investment Account.
  2. Add a recurring planned withdrawal.
  3. Enter the desired withdrawal amount and frequency.
  4. Set the withdrawal period to reflect the client's anticipated retirement income requirements.

These planned withdrawals will simulate pension payments throughout the client's financial plan.

 

Step 3: Transfer the Proceeds Following the Sale of the Business or Farm

Once the sale of the client's business or farm has been modelled, create a transfer to represent the intended contribution.

  1. Navigate to Transfers and add a new transfer.
  2. Set the transfer timing to coincide with the sale of the business or farm.
  3. Complete the transfer details as follows:
    • Transfer From: All Surplus
    • Transfer To: Pension Account (or the name assigned to the Investment Account created in Step 1)
    • Amount: Enter the amount you wish to contribute.
  4. Save the transfer and review the resulting cash flow.

This will direct the specified amount from the client's available surplus into the designated Investment Account, allowing you to model its impact on future retirement income.

 

Important Considerations

Please note that this is a modelling workaround only and does not represent an actual superannuation contribution or the application of Small Business CGT concessions within Voyant.

The workaround does not automatically assess contribution eligibility, applicable CGT concession limits, superannuation contribution caps, or legislative requirements.

Advisers should independently verify the applicable taxation and superannuation rules when providing financial advice.

Future Enhancements

Support for Small Business CGT concessions is currently under development for Voyant Australia.

Until this functionality becomes available, the approach outlined above can be used to illustrate the potential impact of business sale proceeds and subsequent retirement income withdrawals within a client's financial plan.