CGT small business concessions and contributions to super
Small business 50% (active asset) reduction
The amount of a capital gain may be reduced by 50%, if the basic conditions in section 8.5 are satisfied for the gain. There are no additional rules for the 50% (active asset) reduction.
If the capital gain has already been reduced by a discount percentage (where the asset is held for at least 12 months), the 50% active asset reduction applies to the reduced gain.
If a taxpayer qualifies for only the 50% active asset reduction, these proceeds cannot be contributed to super under the lifetime CGT cap, but may be contributed to superannuation and count towards an individual's concessional or non-concessional caps.
Taxpayers have the option of not applying the active asset reduction when selling CGT assets. By not applying this 50% reduction, the amount of capital gain that can be exempt under the $500,000 retirement exemption (and contributed to super under the lifetime CGT cap) can, in many cases, be maximized.
Last modified: Wednesday, May 1, 2019