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Small Business CGT Concessions

The small business CGT concessions are very popular with small business clients as they can significantly reduce or eliminate tax on any capital gain on the sale of a business asset.

Optimising access to these CGT concessions may require some planning or restructuring prior to the business sale, so seeking expert advice prior to entering a business sale is recommended.

The concessions consist of:

  • 15 year exemption (zero tax on the gain)
  • 50% reduction (this is in addition to the general 12 months ownership 50% discount)
  • Retirement exemption (reducing the taxable gain by up to $500,000 per individual)
  • Small business roll-over (deferral of tax)

To access the concessions, the asset owner must broadly be required to pass:

  • The maximum net asset value test (have net assets of <$6 million) or be a small business entity (<$2 million business turnover); and
  • The asset being sold must be an 'active' (business) asset, or shares in a company or units in a trust which owns a business.

Hanrick Curran can assess whether a taxpayer will satisfy the relevant conditions to access the concessions and can assist to restructure affairs before a transaction occurs to enable the best possible after tax outcome.  Please contact your usual Hanrick Curran Advisor or ask for Jamie Towers on 07 3218 3900.

This article was published in the Spring 2013 Horizon. For a pdf version of the newsletter please click here.