Small business CGT concessions

If you are running a small business, pass the aggregated $2 million turnover test or pass the $6 million net asset value test, you may be entitled to the Small Business CGT Concessions when you sell active business assets.

After calculating your net capital gain as normal, and after applying any applicable CGT General Discounts, you may be able to reduce the resulting capital gain by another 50%. In total, this will be a total of a 75% Discount off the gross capital gain when applying the two discounts. This 50% reduction is optional, as some entities might be better off not using this discount but it must be used before using the next two concessions.

A maximum lifetime cap of $500,000 applies to this exemption. The Net Capital gain may be reduced further by applying this exemption to it. It is an exemption allowed by the government specifically to provide funds for retirement. If you use this exemption and you are under 55 years of age, the exempted amount must be contributed into a complying super fund.

Where the gains have not been exempted by the above three exemptions, the small business rollover relief may allow you to defer the gain for up to 2 years after the sale if you are not replacing the asset that was sold within the 2 year period. If the asset is replaced, the capital gain may be reduced to a lesser amount or be disregarded in full.