Small business CGT concessions: when do I qualify?
Monday 6 January 2020
CGT concessions allow you to reduce – or in some cases, completely eliminate – the capital gain from the sale of a business asset, whether it’s held directly by your business entity or in another related structure.
What’s more, the concessions also allow you to make extra super contributions – sometimes up to $1,515,000 – in connection with the sale of business assets.
This is an attractive opportunity for many small business owners heading for retirement, especially given the restrictive annual contributions caps that usually apply.
There are various concessions available, each with their own eligibility rules.
There are two basic conditions you must meet before you can access any of the concessions.
The first requirement tests whether your business is “small” enough to qualify.
There are two alternative tests: a turnover test and a net assets test.
The second major requirement is that the capital gain must arise from the sale (or other CGT event) of an “active” asset.