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Selling your business? See how much CGT the small business concessions could save
You built it, so you should keep as much of the sale as the rules allow. Pop in a few numbers and we’ll walk you through the four small business CGT concessions in the order the ATO applies them, step by step, in plain English. Rules checked against ato.gov.au on 28 October 2026.
The short version
- Who qualifies: you sold an active asset (used in running a business) and your business has turnover under $2 million or you pass the $6 million net asset test.
- Owned it 15+ years and 55 or over, retiring? The whole gain can be disregarded.
- Otherwise: 50% CGT discount, then a further 50% active asset reduction, then up to $500,000 (lifetime) under the retirement exemption, and/or a roll-over to defer the rest.
Who owns the asset?
Cost base is roughly what you paid plus buying and selling costs and capital improvements.
Your age at the sale
Was it an active asset (used in the business)?
Aggregated turnover under $2 million?
Net assets $6 million or less? (maximum net asset value test)
You only need to pass one of these two. Net assets include those of connected entities and affiliates, but not your home or super.
Your estimated taxable capital gain
Step by step
This is the gain added to your taxable income, not the tax itself. The tax depends on your marginal rate (or the company rate).
How it’s worked out (the ATO order)
- Check the basics. The asset must be an active asset, and you need aggregated turnover under $2 million or net assets of $6 million or less, just before the sale.
- 15-year exemption first. Owned continuously for 15 years, you’re 55 or older and the sale is connected with your retirement (or you’re permanently incapacitated): the whole gain is disregarded. Nothing else needed.
- Take off capital losses. Current and earlier-year losses come off next.
- 50% CGT discount. Individuals and trusts that held the asset for 12 months or more halve the gain. Companies can’t.
- 50% active asset reduction. Halve what’s left again.
- Retirement exemption and/or roll-over. Disregard up to $500,000 over your lifetime (paid into super if you’re under 55), and/or defer the rest by buying a replacement active asset.
The calculator assumes the active asset test is met: active for at least half the time you owned it (or 7.5 years if you owned it more than 15 years). Companies and trusts also need a significant individual (20%+) and CGT concession stakeholders, and you can choose to skip the 50% active asset reduction, which it doesn’t model. Shares in a company or interests in a trust have extra tests.
Thresholds used and ATO sources
| Rule | Amount |
|---|---|
| Small business entity aggregated turnover | Less than $2 million |
| Maximum net asset value test | $6 million or less (not indexed) |
| 15-year exemption | 15 years’ continuous ownership; 55+ and retiring, or permanently incapacitated |
| General CGT discount | 50% for individuals and trusts, held 12+ months |
| Active asset reduction | 50% |
| Retirement exemption lifetime limit | $500,000 per individual; into super if under 55 |