When people seek professional advice on how to best own and operate a business they often end up with a company. This choice of business entity, although providing some protection for the owner’s personal assets in the event of the business being sued, does come at a major capital gains cost. For income tax and legal purposes a company is treated as an entity and pays tax on profits at the 30 per cent company tax rate. For other business structures, such as a partnership, unit trust, or discretionary family trust, it is the partners, unit holders, or beneficiaries that pay tax on profits made. This can result in tax being paid at the top marginal tax rate of 46.5 …