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CGT small business concessions and contributions to super

Additional eligibility rules for $500,000 retirement exemption

Section: 8.5

A small business entity may choose to disregard a capital gain from a CGT event happening in relation to an active asset of the small business using the $500,000 (lifetime limit) retirement exemption. The main conditions for eligibility are that:

  • The basic conditions for small business relief are satisfied.
  • For individuals:
    • a choice to disregard the capital gain (ie the CGT exempt amount) has been specified in writing by the day the individual lodges their tax return for the year of the CGT event (or longer as permitted by the Commissioner), and
    • just before the choice is made by the individual, if they are under age 55, the individual must contribute an amount equal to the CGT exempt amount to a super fund at the later of when they made the choice, or receipt of the capital proceeds. If the individual is age 55 or over, the payment may be received directly.
  • For company or trust:
    • a choice to disregard the capital gain (ie the CGT exempt amount) has been specified in writing by the day the company or trust lodges their tax return for the year of the CGT event (or longer as permitted by the Commissioner), and
    • the company or trust has made payment to at least one of its CGT concession stakeholders by the later of seven days after it makes the choice, or seven days after receipt of capital proceeds, and
    • if the recipient is under 55 (just prior to the payment), the company or trust must make the payment by contributing it to a complying super fund on the recipient's behalf. If the recipient is age 55 or over, the payment may be received directly.

Last modified: Tuesday, May 2, 2017