{"id":18852,"date":"2026-10-21T14:25:20","date_gmt":"2026-10-21T03:25:20","guid":{"rendered":"https:\/\/chuatan.com.au\/?p=18852"},"modified":"2026-10-21T14:25:20","modified_gmt":"2026-10-21T03:25:20","slug":"transfer-family-business-to-children-tax-small-business-cgt-concessions","status":"publish","type":"post","link":"https:\/\/chuatan.com.au\/en\/transfer-family-business-to-children-tax-small-business-cgt-concessions\/","title":{"rendered":"Transfer a Family Business to Children: Tax, CGT and Stamp Duty"},"content":{"rendered":"
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For many Chinese and Asian families in Australia, the business is the family’s life work: a restaurant group, an import company or a property portfolio built over decades. As the founders get older, the question is how to pass it on, and at what tax and duty cost.<\/p>\n

It is seldom only about tax: one child may run the business while another lives in Hong Kong. This article explains, in general terms, the tax and duty rules when a family business passes to the next generation during the founders’ lifetime, and how the 2026 reforms affect timing.<\/p>\n\n

First, what is actually being transferred?<\/h2>\n

The tax result depends on whether the business is held personally, through a company, a unit trust or a discretionary trust. Passing on a discretionary trust is usually about handing over control, by changing the appointor and the directors of the trustee company, rather than transferring assets. That may not trigger CGT or duty, but it raises governance questions. Transferring shares, units or business assets usually does trigger tax.<\/p>\n\n

Selling versus gifting shares or units<\/h2>\n

Parents often assume that giving the business to their children, rather than selling it, avoids tax. For capital gains tax it generally does not. Where an asset is given away, or sold for less than its value to a family member who is not dealing at arm’s length, the market value substitution rule generally treats the parent as having received market value. The parent may make a capital gain even though they received little or no money.<\/p>\n

Selling at market value has the same CGT result but gives the parents cash for retirement. If the parents lend the price to the children, the loan should be documented, and the family should agree what happens to it on the parents’ death, especially where other children are not in the business.<\/p>\n

Leaving the business by Will is different, and is covered in our separate article on tax on death.<\/p>\n\n

Small business CGT concessions<\/h2>\n

The small business CGT concessions can reduce or eliminate the capital gain when an active business asset, or shares or units in a business entity, are transferred. All four continue after the 2026 reforms.<\/p>\n

Basic conditions<\/h3>\n

In general terms, the basic conditions require that:<\/p>\n