Advanced guide to capital gains tax concessions for small business 2010-11

Interaction with other concessions

If you do not qualify for the small business 15-year exemption, the small business 50% active asset reduction may apply to reduce the capital gain.

Unlike the other small business concessions, the small business 50% active asset reduction applies automatically if the basic conditions are satisfied, unless you choose for it not to apply.

For example, you might prefer for it not to apply and instead choose the small business retirement exemption or the small business rollover. Making this choice allows you to achieve the best result for your circumstances, for example a company or trust may make larger tax-free payments under the small business retirement exemption.

Otherwise, the small business retirement exemption or the small business rollover (or both) may apply to the capital gain that remains after applying the small business 50% active asset reduction.

Sections within Small business 50% active asset reduction

• Interaction with other concessions
• Conditions you must meet
• Consequences of applying the reduction
• Fixed trust distributions and the 50% active asset reduction