Why These Concessions Matter
These concessions can reduce your capital gains tax to nil, saving thousands. They are especially valuable for:
- Business exits
- Succession planning
- Retirement transitions
Are You Eligible?
You may qualify if:
- Your business has an aggregated turnover under $2 million, or
- Your aggregated assets are under $6 million (Maximum Net Asset Value test)
- The asset is an ‘active asset’ used in your business or in a business of an entity connected to you, or in the business of an affiliate of yours.
Additional rules apply for shares, units, and trust interests.
How It Works
Applying the concessions follows a specific order:
- Review eligibility to access the concessions – if yes:
- Apply the 15-Year Exemption first (if eligible)
- Offset any capital losses (if applicable)
- Apply the CGT discount (if applicable)
- Apply the 50% Active Asset Reduction
- Use the Retirement Exemption and/or Rollover to reduce any remaining gain (if eligible/desirable)
A combination of these concessions can be used to maximise your tax relief.
Frequently Asked Questions
Yes, if eligible, you can combine concessions in a specific order.
An example of an active asset is one that is used in the course of running your business, such as a premises, goodwill, or certain shares.
The MNAV test is one of the basic eligibility criteria for small business CGT concessions. It requires that the total net value of your business, connected entities’ and affiliates’ assets is less than $6 million (excluding certain assets like your home, superannuation, and personal use assets). If you meet this test, you may qualify for the concessions.
You only need to meet one of the basic conditions – either the turnover test, where aggregated turnover is under $2 million (which includes the turnover of connected entities and affiliates) or the $6 million MNAV test – to qualify for the small business CGT concessions.
You must contribute the exempt amount (up to $500,000) into a complying superannuation fund.
No, the gain is deferred until the replacement asset is sold or its use changes.
Need Help Navigating the Rules?
Our specialist team will guide you through eligibility, documentation, and strategic planning to maximise your tax relief.
We work directly with business owners or through accountants to deliver advice.
Book your complimentary consultation today:
Phone 02 8264 0755 or email [email protected] to book an initial complimentary consultation with Sean Urquhart or Amy Waterhouse.
Or click below to contact your preferred Advisor.
