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

Termination of employment not required

Payments made by a company or trust to an employee of an amount exempted under the retirement exemption are deemed to be payments in respect of the termination of employment of the employee. There is no need for an actual termination of employment.

Where such payments are made by a company or trust to a CGT concession stakeholder who is not an employee, the stakeholder is not required to cease any activity or office holding. Also see Deemed dividends.

For an individual choosing the retirement exemption, there is no requirement to terminate any activity or cease their business.

Payments made on or after 23 June 2009 to a CGT concession stakeholder who is an employee, to satisfy the retirement exemption requirements, are no longer deemed to be in consequence of termination of employment. Also see Deemed dividends. Such payments also ceased to be treated as eligible termination payments from 2007-08.

Sections within Small business retirement exemption

• Interaction with other concessions
• Conditions you must meet
• Termination of employment not required
• Deemed dividends
• Capital proceeds received in instalments
• Receiving actual capital proceeds not required
• CGT retirement exemption limit
• Consequences of choosing the exemption
• Superannuation consequences