What are the CGT concessions?

There are four small business capital gains tax (CGT) concessions.

Small business 15-year exemption

If your business has owned an asset for 15 years and you are aged 55 years or over and are retiring, or if you are permanently incapacitated, you won’t have an assessable capital gain when you sell the asset.

Small business 50% active asset reduction

You can reduce the capital gain on a business (active) asset by 50%.

Small business retirement exemption

A capital gain from the sale of a business asset will be exempt up to a lifetime limit of $500,000. If you are under 55 years of age, the exempt amount must be paid into a complying superannuation fund or a retirement savings account to obtain the exemption.

Small business rollover

If you sell a small business asset, you can defer your capital gain until a later year. This means you don’t include the gain in your income until a change in circumstances causes a CGT event to happen that crystallises the gain – for example, you don’t acquire a replacement asset within the required period, or you later sell that replacement asset or stop using it in your business. When a CGT event crystallises the gain you have previously deferred, all or part of the gain that you deferred becomes assessable.

    Last modified: 21 Jun 2016QC 19744