In this guide
- What are the small business CGT concessions?
- Which CGT concession applies?
- Comparison: 15-year exemption vs Retirement exemption
- Am I eligible for the small business exemptions?
- Contributing to your super using a small business exemption
- How the lifetime CGT cap works
- How do I elect to exclude contributions into my super account?
During their working life, many small business owners plough every surplus dollar into their business and then use the proceeds from its eventual sale to pay for their retirement.
This can be a sensible strategy, especially if you take advantage of the various small business capital gains tax (CGT) concessions on offer when you sell. Not only can these concessions significantly cut your CGT bill, but they can also allow you to contribute more money into your super account without having to worry about the normal super contribution limits.
Coming changes to CGT
From 1 July 2027, the flat 50% CGT discount will be replaced by a new discount for indexation and a minimum tax rate of 30% on assessable gains.
The change is prospective. Any incease in business value accrued before 1 July 2027 continues to attract the 50% CGT discount and no minimum tax rate applies to it.
The four current small business CGT concessions will remain in place and the 50% active assets reduction will be extended to small businesses with aggregated turnover of less than $10 million (up from $2 million).
What are the small business CGT concessions?
There are four small business CGT concessions on offer:
- Small business 15-year exemption (Subdivision 152-B of the Tax Act)
- Small business 50% active asset reduction (Subdivision 152-C)
- Small business retirement exemption (Subdivision 152-D)
- Small business rollover (Subdivision 152-E)
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