Retirement, Superannuation, Tax

CGT concessions a super bonus

small business CGT concessions

The small business CGT concessions can be of great benefit for individuals who have not accumulated much super while running their own enterprises.

A technical specialist has reinforced the value of the small business capital gains tax (CGT) concessions for individuals running their own enterprises who in the process have not made any superannuation contributions for their retirement.

“Business owners who might not have accumulated a lot of super, when they sell their business assets and are planning for retirement, the lifetime CGT cap is incredibly generous for them,” Colonial First State senior technical manager Linda Bruce told selfmanagedsuper.

“It has nothing to do with either the concessional or non-concessional contributions caps and at the moment stands at $1.65 million. That’s incredibly generous,” she noted.

“So this measure allows the relevant individual trustee to put money from the sale proceeds of their business into super through using this contributions cap.”

She pointed out the rules in effect provide a win-win situation for small business owners as they can also take advantage of the associated tax benefits as well.

“Usually when a person sells certain assets they need to pay capital gains tax and who likes that. But if a small business owner is able to use any of the these concessions, in particular the 15-year exemption, any of the capital gains accrued since the inception of the business will be wiped out for tax purposes,” she explained.

“That means the individual will not have to pay any capital gains tax when they sell the business when the person is, for example, retiring.

Bruce did, however, acknowledge there are some qualifying conditions needing to be satisfied before a person can use the small business CGT concessions.

“There are two basic conditions that need to be met before these concessions can be used. The first one is the $6 million net assets value test and the second one is the active assets test,” she explained.

Further she warned the small business CGT concessions can get quite complex if the asset sale involves shares or units in trust.

Linda Bruce will be discussing this topic in greater detail during her presentation at the SMSF Professionals Day 2023. To register for the event please visit

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