Capital gains tax (CGT) concessions for small business - more changes for the 2007-09 years

Passively held assets

A new basic condition allows access to the concessions via the turnover test for taxpayers who are not carrying on a business, but own a CGT asset used in the business of an affiliate or an entity connected with the asset owner. It also applies where the asset is held ready for use in, or is inherently connected with, the business of an affiliate or entity connected with the asset owner.

To qualify for the concessions under this new basic condition, the business that uses the asset must have less than $2 million aggregated turnover. A new aggregation rule applies in calculating aggregated turnover in these situations. There is also a new affiliate rule for spouses and children under 18 that applies in these situations.

These changes apply to CGT events occurring in 2007-08 and later income years.