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

Choosing the small business concessions

You must choose the 15-year exemption, the retirement exemption and the rollover for those concessions to apply. However, the 50% active asset reduction applies automatically if the basic conditions are satisfied and you have not specifically chosen that it not apply.

Generally, a choice available under the CGT law must be made by the day you lodge your income tax return for the income year in which the relevant CGT event happened, or within such further time as the Commissioner allows.

The way you prepare your income tax return is generally sufficient evidence of the choice you have made. However, the retirement exemption requires you to keep a written record of the amount you choose to disregard.

If you became eligible for the concessions as a result of the June 2009 amendments you have until the later of:

• the day the entity lodges its income tax return for the income year in which the relevant CGT event happened
• 12 months after the day on which these amendments receive royal assent, or
• a later day allowed by the Commissioner.

The extension of time to make a choice applies to CGT events happening before the 23 June 2009.

Sections within How do you apply losses, concessions and the discount?

• Applying capital losses
• Applying the discount and concessions
• The order in which to apply the discount and concessions
• Depreciating assets
• Choosing the small business concessions
• Distributions out of concession amounts: tax consequences
• Complying superannuation funds and the concessions
• Extensions of time