This paper reviews the taxation of small business in relation to Ralph Review which has provided a basis for a simplified tax regime for the operation of small business, and introduced concessions for the application of Capital Gains Tax (CGT') to business. The proposals from the Ralph Report effectively are either in place (e.g. CGT) or are to be introduced over the remainder of this financial year, to have a latest effective operational date of 1 July 2001.
This paper will examine the new capital gains tax (CGT) concessions as they apply to trusts. The analysis will include the CGT discount and the new small business concessions. As the CGT concessions are new, the basic framework for each head of relief will be examined before discussing the more complex issues related to trusts. Case studies are provided throughout the paper in an effort to allow readers to evaluate the effectiveness of the trust as an asset holding vehicle and business structure in the post-Ralph era.