In this guide
- What are the small business CGT concessions?
- Which CGT concession applies?
- Comparison: 15-year exemption vs Retirement exemption
- Am I eligible for the small business exemptions?
- Contributing to your super using a small business exemption
- How the lifetime CGT cap works
- How do I elect to exclude contributions into my super account?
During their working life, many small business owners plough every surplus dollar into their business and then use the proceeds from its eventual sale to pay for their retirement.
This can be a sensible strategy, especially if you take advantage of the various small business capital gains tax (CGT) concessions on offer when you sell. Not only can these concessions significantly cut your CGT bill, but they can also allow you to contribute more money into your super account without having to worry about the normal super contribution limits.
Need to know
The eligibility criteria for the government’s four small business CGT concessions are very complex. This is an area where it’s vital to get specialist tax advice to ensure you understand how the rules apply to your situation and whether you qualify.
There are also strict rules on the order in which you can apply the concessions and your resulting tax position can vary significantly. Ensure you consult a licensed tax adviser before making any decisions or contributing to your super account.
What are the small business CGT concessions?
There are four small business CGT concessions on offer:
- Small business 15-year exemption (Subdivision 152-B of the Tax Act)
- Small business 50% active asset reduction (Subdivision 152-C)
- Small business retirement exemption (Subdivision 152-D)
- Small business rollover (Subdivision 152-E)
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