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CGT small business concessions and contributions to super

Capital gains tax concessions

Section: 8.1

Small business entities include a sole trader, partners in a partnership, trusts and companies. The word 'entity' will be used in this section to describe 'small business entities'.

Capital Gains Tax Concessions

Small business owners have potentially one of, or a combination of the following four concessions available to them to reduce any capital gain upon the sale of active assets of a business.

  1. The small business 15-year exemption (allows a business person to disregard the entire capital gain for tax purposes).
  2. The small business 50% (active asset) reduction.
  3. The small business retirement exemption (allows a business person to disregard up to $500,000 of capital gains for tax purposes).
  4. The small business rollover (allows deferral of the capital gain realised on the sale of active assets of the business where the proceeds are used to purchase replacement assets).

In addition, a small business owner who is an individual taxpayer may also be eligible for the 50% individual discount for CGT assets held for longer than 12 months.

Last modified: Tuesday, May 2, 2017