CGT on the Sale of a Medical Practice

Selling or transitioning out of a medical practice is one of the largest financial events in a doctor’s career — and one of the most heavily taxed if it isn’t planned properly. Capital gains tax (CGT) applies to the sale of practice goodwill, equipment, and in some cases practice-related property.

What Triggers CGT in a Practice Sale

• Sale of practice goodwill to an incoming doctor or corporate buyer
• Sale of medical equipment, fit-out, or premises held by the practice entity
• Restructuring a practice ahead of a partner buy-in or buy-out
• Winding up a practice entity such as a trust, partnership, or company

Small Business CGT Concessions

Many medical practices qualify as small businesses for CGT purposes, which can open access to concessions such as the 15-year exemption, the 50% active asset reduction, the retirement exemption, and rollover relief. Eligibility depends on turnover, asset value tests, and how the practice entity is structured.

Why Timing and Structure Matter

The CGT outcome of a practice sale is heavily influenced by decisions made years earlier. We work with doctors well ahead of a planned sale or retirement to structure the transaction for the best available concessions.

Related Resources

• Back to Accounting and Tax Services for Doctors
• Practice Entity Structuring for Doctors
• Retirement and Wealth Planning for Physicians
• Accounting & Tax for Multi-Doctor Medical Practices
• Commercial Property as a Medical Centre

Planning a practice sale, partner exit, or retirement? Speak with A One Accountants early — CGT planning works best well before contracts are signed.