Author │ MAS Tax Accountants Dandenong
The small business CGT concessions allow qualifying small businesses the ability to fully disregard or reduce capital gains made by a small business. The rules apply to both business assets and ownership interests in a business entity (such as company shares).
The four CGT concessions available are:
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The 15 year exemption
Where a taxpayer who is at least 55 years of age and is retiring disposes of a CGT asset that has been owned for a minimum of 15 years.
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The 50% active asset reduction
The capital gain arising from the disposal of a qualifying (active) CGT asset may be discounted by 50%,
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The retirement exemption
An exemption from CGT may apply for a disposal of a qualifying business (active) asset under the retirement exemption up to a lifetime maximum cap of $500,000. It is not necessary to actually retire and the concession can be utilised more than once up to the cap. Where the taxpayer is under 55 years, the proceeds are only exempt if this is rolled over into a complying superannuation fund, approved deposit fund or retirement savings account.
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The CGT small business roll-over
A capital gain arising from the disposal of a CGT asset may be deferred provided a replacement asset is acquired within a two year period. The gain is deferred until disposal of the replacement asset.
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