Eligibility criteria

Subdivision 152-AExternal Link contains the general eligibility rules for entities to qualify for the CGT concessions as well as the exemptions available.


The entity must either:

  • be a small business entity for the income year
  • satisfy a maximum net asset value test
  • be a partner in a partnership that is a small business entity for the income year and the CGT asset is an asset of the partnership.

Section 328-110External Link states that to qualify as a small business entity the entity must carry on a business in the current year and the aggregated turnover for the previous year was less than $2 million and/or the aggregated turnover for the current year is likely to be less than $2 million.

Certain transactions with affiliates are excluded from the turnover calculation.

The maximum value for the net asset test is $6 million for 2007-08 and later years in accordance with section 152-15External Link.

Nature of the asset

The CGT asset must satisfy the active asset test under section 152-35External Link.

That is, under section 152-40External Link, a person owns an active asset if they use it or hold it ready for use in the course of carrying on a business. The asset can also be used or held by an affiliate or another entity connected to the person.

Active assets include intangible assets such as goodwill. If the asset has been owned less than 15 years it must have been active for at least half that time. If it has been owned for more than 15 years it must have been an active asset for at least seven and a half years.

    Last modified: 22 Nov 2013QC 34181