Michael (aged 50) is considering selling his mechanical workshop.Michael has a purchaser who is interested in the business and he has advised them...

Michael (aged 50) is considering selling his mechanical workshop. Michael has a purchaser who is interested in the business and he has advised them that his asking price is $1,120,000. Michael has calculated this asking price as follows; 

Goodwill $200,000 

Fittings and Fixtures $125,000 

Trading Stock $295,000 

Building Premises $500 000  

 $1,120,000 

 Notes: 

1. All values stated above are market values. 2. Michael has advised that Fittings and Fixtures have an adjusted value (written down value) for tax purposes of $120,000 and an original cost of $180,000. 3. Trading stock is valued at a cost of $150,000 in the financial accounts. 4. The building premises were purchased on 1 July 2010 for $375,000 and has a current market value of $500,000. Taking into account building allowance the current tax cost base for the building is $350,000. 5. Michael started the business himself on 1 July 2005 from leased premises. 

Michael is concerned about the tax consequences on the sale of his business and has asked for your advice. 

Required: 

You are required to provide comments regarding the likely tax consequences on the sale of each of his business assets should the sale go ahead as stated above. You should also note any small business concessions Michael should consider. You should comment on any further information you would require to provide more detailed advice.