Nick Mitchell sold his business in April 2018 and he wants advice about hispossible capital gains tax liability in light of the following facts: Nick started his business in 2006 when he purchased

Nick Mitchell sold his business in April 2018 and he wants advice about hispossible capital gains tax liability in light of the following facts: Nick started his business in 2006 when he purchased the buildingfreehold for $600,000 and he has run his business consultancy businesscontinuously in these premises since then until the business was sold inApril 2018. Nick sold his business for $5,200,000 (excluding GST). Of this $5,200,000, $4,200,000 relates to the building and the remaining$1,000,000 relates to the other business assets including goodwill. The written down value of the business plant and equipment at the time ofthe business sale was $300,000 and $300,000 of the $1,000,000 shownabove for the other assets is allocated to the value of the plant andequipment at the written down value at the date of sale. In April 2018, at the time the business was sold, the amount owing on abusiness loan for this business was $1 million. The business has had a current annual turnover of $2,400,000 (excludingGST). This figure has remained virtually the same over the last 3 years. Nick’s wife, Lulu, runs a cleaning business, in her own name, which hastotal net assets of $350,000. Nick and Lulu consult each other regularlyabout the decisions concerning the running of both businesses. Nick also owns a portfolio of shares with a current market value of$480,000. Nick also holds 45% of the shares in SBW Pty Ltd, a private company thatowns and runs a catering business. The total net assets of SBW Pty Ltdhave a fair market value of $500,000. The next largest shareholder owns30% of this company. Nick is also a beneficiary in the Mitchell Family Trust and he informs youthat he has only received modest distributions from this trust in theprevious 4 years. The amount of these distributions were $4,000 in 2015(when the trust had net income of $20,000) and $5,000 in 2016 (when thetrust had net income of $12,000). The net assets of this Trust as at April2018 were $300,000. Nick also estimates that 20% of his home is used for running his businessand that the home is presently worth $600,000. Nick currently has a loanof $100,000 against this property. Nick is aged 62 and he may buy another business in the future.Required:Based on the above information provide advice, with supporting reasoning, toNick of what his net capital gain is likely to be, after applying all the variousdiscounts and concessions that he may be eligible for.