Situation
A cattle farming client was preparing to sell their farm and expected a significant increase in personal income in the 2026 financial year from livestock and equipment sales. Their 2025 tax returns had already been lodged, and livestock had been valued using average cost, resulting in lower taxable income in 2025 and a higher projected tax liability in 2026.
What We Did
After reviewing the client's tax position, we changed the 2025 Partnership Tax Return to value livestock at market value rather than average cost. This required updates to the associated personal tax returns, allowing income to be brought forward into a lower-income year where more favourable tax rates applied. We also worked closely with the client's financial planner to apply the available Small Business CGT Concessions, including the Retirement Exemption, to minimise the capital gains tax consequences of the farm sale. In addition, we assisted with planning and implementing Downsizer Contributions following the sale of the client's residence on the farm.
Outcome
By strategically reallocating income into a lower-tax year, the client achieved an estimated tax saving of approximately $15,000. Through the effective use of Small Business CGT Concessions, the taxable capital gain on the farm sale was reduced to nil. The client was also able to contribute up to $600,000 to superannuation through Downsizer Contributions, while further strengthening their retirement position through the use of the Retirement Exemption provisions.