• $2 million aggregated turnover test

    Prior to 1 July 2006

    From 1 July 2006

    From 1 July 2007

    From 1 July 2009

    No equivalent

    No equivalent

    A new turnover test can be used instead of the maximum net asset value test. A business will pass the turnover test if it has aggregated turnover of less than $2 million.

    Partners in a partnership will also qualify if the partnership meets the turnover test and the asset is an asset of the partnership.

    No change

    No equivalent

    No equivalent

    The small business capital gains tax (CGT) concessions are technically unworkable for partners in a partnership that are seeking relief via the small business entity test, as a partner’s interest in a CGT asset of the partnership is not an ‘asset of the partnership’. The amendments correct the law so that it applies as intended to the partner’s ‘interest in an asset of the partnership’.

    No change

    No equivalent

    No equivalent

    Taxpayers that do not carry on a business in their own right but own a CGT asset used in the business of their affiliate or connected entity (passively held assets) are able to use the $2 million aggregated turnover test to qualify for the concessions.

    No change

    No equivalent

    No equivalent

    The aggregation rules apply differently to passively held asset cases to deem an affiliate or entity connected with the asset owner to also be an affiliate of, or connected with, the business entity. This ensures that the turnovers of all entities within the business structure are counted.

    No change

    No equivalent

    No equivalent

    One or more partners in a partnership can use the $2 million aggregated turnover test to qualify for the concessions where the asset is owned by those partners (and it is not a partnership asset), and that asset is used in the business of the partnership.

    When the aggregated turnover test was first introduced, the asset had to be an asset of the partnership to qualify.

    No change

      Last modified: 21 Jun 2016QC 21145