Basic eligibility
Broadly, you need to be a small business entity with aggregated turnover under $2 million, or have net assets of $6 million or less (the maximum net asset value test), and the asset must be an active asset.
The four concessions
- 15-year exemption: no CGT if the asset was held for 15 years and you are 55+ and retiring, or permanently incapacitated.
- 50% active asset reduction.
- Retirement exemption: up to a $500,000 lifetime limit; if under 55, it must go into super.
- Rollover: defer the gain if you buy a replacement asset.
Super and the CGT cap
Amounts from the 15-year exemption and retirement exemption can be contributed under a separate CGT cap, rather than the non-concessional cap, if you elect correctly and on time. The election form must be lodged by the time you make the contribution.
Plan early
Structure, records and timing in the years before a sale make the difference. See advice for business owners. Tax advice is provided separately through PRM.
Quick answers
What is the small business CGT turnover test?
Aggregated turnover under $2 million, or net assets of $6 million or less, per the ATO.
Sources
General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is authorised under Financial Force Pty Ltd AFSL 238337. Shay has been authorised since 18 October 2011.