• Are you entitled to the small business CGT tax concessions?

The small business CGT tax concessions are one of the most favourable tax concessions available.  The very best small business CGT concession is the 15 year asset exemption which disregards CGT derived from the sale of from an “active asset”.

Active asset

The small business capital gains tax (CGT) concessions allow you to reduce, disregard or defer some or all of a capital gain from an active asset used in a small business.

A CGT asset is an active asset if your small business owns it and:

• It is used or held ready for use in the course of carrying on a business (whether alone or in partnership)
• it is an intangible asset (for example, goodwill) inherently connected with a business you carry on (whether alone or in partnership).

The active asset test is satisfied if the asset was an active asset:

• for a total of at least 7½ years during the test period, if was owned for more than 15 years, or
• for at least half of the test period, if you’ve owned it for 15 years or less.

Concessions

There are four small business tax concessions available:

• the 15 year asset exemption;
• the 50 per cent active assets concession;
• the retirement exemption;
• the business asset rollover concession.

1. 15 year asset exemption

Generally, you will pay no CGT on the disposal of an asset if your small business has held the asset for more than 15 years.

You will not pay CGT when you dispose of an active asset if you meet both of the following additional requirements:

• • you are aged 55 years or older and retiring, or are permanently incapacitated
  • you have continuously owned the asset for at least 15 years.

2. 50 per cent active assets concession;

If your business has owned the asset for more than 7½ years but less than 15 years you will be entitled to a total 75% discount of the CGT.

3. Retirement exemption

If you are under 55 and retiring,  the capital gains that you make on the disposal of an active assets may be contributed to your superannuation.

There is a lifetime limit on this exemption of $500,000.

If you are under 55, the exempt amount from the proceeds on disposal of an active asset may

There is a $500,000 lifetime limit on this concession.

4.Small business rollover

The small business rollover allows you to defer all or part of a capital gain made from a CGT event happening to an active asset.

For example, you can defer your capital gain until a later year if you buy a replacement asset or improve an existing active asset.

The replacement asset can be acquired one year before or up to 2 years after the last CGT event in the income year for which you choose the rollover.

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If you are wondering whether you are entitled to any of the Small Busienss CGT tax concessions, contact us now so that you can structure your busienss affairs accordingly.