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.
1) Small Business 15-year CGT Asset Exemption:
There are four concessions that may be available if you meet the specific requirements of the concessions:
The entire gain on selling the business asset is exempt from CGT, with no further tax consequences. This concession is the most favourable of the four.
If you do not qualify for this exemption, there may be relief available using the other three concessions.
“Small business owners can access a suite of capital gains tax concessions, but to qualify they generally must satisfy the basic conditions such as the $6 million net asset test or the $3 million maximum net asset value.”
2) Small Business 50% reduction
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.
3) Small Business Retirement Exemption
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.
“Taken together, the small business CGT concessions can effectively eliminate capital gains tax on the sale of business assets for eligible small business owners.”
4) Small Business Rollover Relief
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.
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
Small business CGT concessions can significantly reduce or eliminate capital gains tax on business assets.
These concessions are designed to support small business owners when selling or transitioning assets used in the business.
Eligibility is based on satisfying several tests, not just one.
You must meet conditions such as the basic conditions test, active asset test, and, in some cases, an ownership period requirement to qualify.
There are four distinct concessions, each offering different benefits.
The main ones are the 15-year exemption, 50 % active asset reduction, retirement exemption, and roll-over relief — each tailored to different scenarios and timing needs.
Driven by our values
Effortless and Seamless
On-Boarding Process
Intuitive and Knowledgeable
Direct Expert
Access
Useful and Articulate
Financial
Reporting
Forward
Thinking
Compliance Solutions
Streamlined
Tech
Integrated and Automated
Frequently Asked Questions
What are the small business CGT concessions?
The small business capital gains tax (CGT) concessions are a set of tax breaks that reduce or eliminate the CGT payable on the sale of business assets for qualifying small business owners.
Who is eligible for the small business CGT concessions?
Eligibility generally depends on meeting tests such as the basic conditions (including turnover and asset tests), active asset requirements, and holding the asset for a minimum period (usually 15 years for some concessions).
What kinds of assets can these concessions apply to?
These concessions apply to CGT assets used in the business, such as business premises or goodwill, provided they meet the relevant active asset tests and other conditions.
Are there different types of small business CGT concessions?
Yes — there are four main concessions: the 15-year exemption, 50 % active asset reduction, retirement exemption, and roll-over relief. Each provides different tax outcomes depending on circumstances.
Do I have to pay tax if I use the concessions?
Depending on which concessions you apply, you may reduce your taxable gain to zero, get a reduction, or defer tax — for example, the 15-year exemption can fully exempt a gain if you satisfy the ownership period and age or retirement conditions.
Do I need to meet specific requirements to access these concessions?
Yes — the article explains the concessions are only available if you meet the specific requirements for the relevant concession.
North Advisory’s Reviews 
On 
Flo Mitchell
4 weeks ago
Changed to this company in 2019 from former accountant and love their approach of organizing everything for me face to face with Xero set up plus being able to call as much as I need for set annual fee. They also picked up on something that was not done correctly by my former accountant and saved me $4k for this.
Timothy Cummins
A month ago
They the truly the best, Martin and Judy are so experienced, knowledgeable & professonal, also quite like speaking with Rose : ) all people are so lovely!
Michael Iera
2 months ago
Positive, Responsiveness, Quality, Professionalism, Value
Michael Iera
2 months ago
Excellent company in regards to service and professionalism. Very experienced in dealing with complex matters. Highly recommended.
Reach out we are here to help
Recognising the uniqueness of each business, we specialise in customised accounting services crafted to meet your specific needs and drive business growth.
Don’t hesitate to contact us if you’re ready to streamline your financial management with tailored solutions. Your business’s success is our primary focus. Fill in the contact form or call us to book an initial 30-minute chat.
Suite 6, 11 Oaks Avenue
Dee Why, Northern Beaches
NSW 2099
Australia