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CGT small business concessions and contributions to super

Lifetime CGT cap

Section: 8.1

An individual may contribute certain proceeds from the sale of assets used in the course of carrying on a small business, and elect for them to count towards a separate lifetime CGT cap, rather than the non-concessional or concessional caps.

Broadly, there are two CGT small business concessions that relate to amounts that may be contributed to super under the lifetime CGT cap:

  • small business 15-year exemption
  • small business retirement exemption.

Importantly, there are separate rules for:

  • qualifying for the small business CGT exemptions, and
  • contributing certain proceeds from the sale of business assets to superannuation under the lifetime CGT cap.

In certain limited circumstances, amounts that do not qualify for the two small business CGT exemptions may be contributed to superannuation under the lifetime CGT cap. These circumstances, the requirements for meeting the CGT exemptions and the requirements for contributing amounts under the lifetime CGT cap are covered in detail in Sections 8.6 (small business 15-year exemption) and 8.8 (small business retirement exemption).

Amounts contributed in excess of the lifetime CGT cap will be either concessional (if a valid deduction notice is submitted and a tax deduction claimed) or non- concessional contributions, and will count toward the person's available concessional or non-concessional cap.

An individual's total superannuation balance will not impact their ability to contribute CGT exempt amounts. However, CGT contributions (once made) count towards an individual's total superannuation balance and may then impact a range of other measures (for example the individual's future non-concessional cap).

The following table shows the lifetime CGT cap amounts:

Income year Lifetime CGT cap
2018-19 $1.480 million

The CGT cap for each financial year is indexed by changes in average weekly ordinary time earnings (AWOTE). This is rounded down to the nearest $5,000. Due to this rounding, the cap may not rise every financial year. The cap will never decrease.

Last modified: Thursday, November 15, 2018