Small Business CGT Concessions
At DFK Everalls, we understand the complexities small business owners face when managing their finances. Navigating Capital Gains Tax (CGT) can be challenging, especially when it comes to selling your business or assets. That’s why we’re here to help you take full advantage of the Small Business CGT Concessions—a powerful tool to reduce your taxable capital gains and secure greater financial outcomes.
What Are Small Business CGT Concessions?
Small Business CGT Concessions are specific tax relief measures designed to assist small business owners in reducing or eliminating the CGT liability when selling a business or its assets. These concessions can significantly ease the financial burden and help you retain more of your hard-earned wealth.
Who is Eligible?
Not every business qualifies for these concessions. Key eligibility criteria include:
- Small Business Entity Thresholds: Your business must have:
- an aggregated turnover of less than $2 million; OR
- Generally, the combined net assets of the business and its owners/controllers (excluding their main residence and super) must be less than $6M.
- Active Asset Test: The asset being sold must have been actively used in your business (or an associate’s business) for at least 7.5 years or half of its ownership period (whichever is lesser).
- Ownership Structure: You must meet specific ownership rules regarding the asset and business.
At DFK Everalls, we take the time to assess your unique situation to ensure you currently meet or can meet the eligibility requirements at the time of sale.
Types of CGT Concessions
Here are the four main concessions available to small business owners:
- 15-Year Exemption: If you’ve owned an active asset for at least 15 years and are aged 55 or over and retiring, or permanently incapacitated, you may not have to pay any CGT when you sell.
- 50% Active Asset Reduction: This concession allows you to reduce the taxable capital gain on the sale of an active asset by 50%. This is in addition to the general 50% CGT discount (if the asset has been owned for more than 12 months by anyone except a company).
- Retirement Exemption: This exempts up to $500,000 per person per lifetime of capital gains from tax when selling active assets, provided the proceeds are used for retirement purposes. Eligibility is automatic for those aged 55+, while those aged under 55 must contribute the money to their super fund. It may be possible for companies/trusts to connect to multiple individuals and obtain multiple $500,000 thresholds.
- Rollover Relief: Defer your CGT liability by reinvesting the capital gain in a replacement active asset or an improvement to an existing active asset.
There is a lot of fine print and particular criteria for particular assets and ownership structures as well as different options for what order the exemptions are applied in. So, talk to our expert team at DFK Everalls so we can guide you through these options to maximise your net sale proceeds.
Why Choose DFK Everalls?
Local Canberra Expertise
As trusted advisors in the Canberra region, we understand local small businesses’ unique challenges and opportunities. Our insights into the local market ensure that your financial strategy is tailored specifically to your needs.
Personalised Guidance
Our holistic approach means we don’t just look at your CGT position—we consider your entire financial picture. Whether you’re planning a business sale, restructuring, or transitioning into retirement, we provide advice you can trust.
Proven Results
With years of experience helping Canberra-based business owners, we have a proven track record of helping clients reduce their tax liabilities while maximising their financial outcomes. Our dedication to clear, honest, and proactive advice sets us apart.
How We Can Help
Our step-by-step process includes:
- Reviewing your assets and business structure.
- Assessing eligibility for CGT concessions.
- Creating a tailored strategy to maximise available concessions.
- Assisting with documentation and compliance requirements.
Frequently Asked Questions
Our step-by-step process includes:
- Reviewing your assets and business structure.
- Assessing eligibility for CGT concessions.
- Creating a tailored strategy to maximise available concessions.
- Assisting with documentation and compliance requirements.
Take the Next Step
At DFK Everalls, we’re committed to helping small business owners achieve financial peace of mind. Contact us today to explore how we can help you leverage Small Business CGT Concessions to secure your future.
Contact Us to book your consultation or learn more about our Business Advisory services.
Disclaimer
This information contained in this document is intended as general information only and does not constitute formal tax or professional advice. The high level and summarised nature of the information in this article means that many important assumptions have been made, and accordingly more detailed tax advice should be obtained from us prior to implementing anything contained within this article.
