Advanced guide to capital gains tax concessions for small business 2009-10

Small business entity

You will be a small business entity if you are an individual, partnership, company or trust that:

• is carrying on a business, and
• has an aggregated turnover of less than $2 million.

What is aggregated turnover?

Aggregated turnover is your annual turnover plus the annual turnovers of any business entities that are your affiliates or that are connected with you. There are aggregation rules help you determine if you need to include the annual turnover of another business entity (a relevant entity) when calculating your aggregated turnover. These rules aim to prevent businesses splitting their activities in order to inappropriately access the small business entity concessions.

A relevant entity is an entity that is your affiliate or is connected with you.

Sections within Basic conditions for the small business CGT concessions

• Small business entity
• Working out if you are a small business entity
• Passively-held assets
• Partner in a partnership - using the small business entity test
• Businesses that are winding up
• Maximum net asset value test
• Who an affiliate is
• When an entity is connected with you
• Active asset test
• Additional conditions if the CGT asset is a share or trust interest
• CGT concession stakeholder
• Significant individual test
• The 90% test