Contributions, Tax

Timing key to CGT contributions

Small business CGT concessions

Timing constraints are an important factor to consider when SMSF members are looking to make contributions under the small business CGT concessions.

A sector specialist has highlighted the importance of two timeframe parameters needing to be satisfied when SMSF members are looking to make a contribution under the small business capital gains tax (CGT) concessions.

Colonial First State senior technical manager Linda Bruce told delegates at the Melbourne leg of SMSF Professionals Day 2023, co-hosted by selfmanagedsuper and Accurium, last Thursday that the first of these involves making the election to use the lifetime CGT contribution cap.

“The CGT election form that can be downloaded from the ATO website must be filled out and submitted to the super fund trustees before or at the time the contribution is made,” Bruce noted during her presentation.

“If the contribution is made and the form was not submitted to the fund trustees, then by law it’s too late and instead of being treated as part of the lifetime CGT cap, it will be included as a non-concessional contribution for the member.”

The second element regarding timing of contributions under the small business CGT concessions involves when the contribution is actually made, she said.

“When individuals sell an asset and look to make a contribution under the lifetime CGT contribution cap, the rules are pretty straightforward. The CGT cap contribution must be made before the later of the day that the taxpayer is required to lodge their tax return for the income year in which the capital gain was realised or within 30 days after the receipt of the capital proceeds,” she noted.

However, she revealed many people get caught out by these rules when the asset or assets in question are held by an entity in which the SMSF is invested.

This is because if an entity has sold the asset, the proceeds are often distributed straightaway and this may be done months before the taxpayer concerned is required to lodge their tax return.

Bruce pointed out in these situations it is common for individuals to attempt to make a super contribution under the lifetime CGT cap when they lodge their tax return without realising more than 30 days have passed since the proceeds from the sale have been received, rendering them ineligible to do so.

Linda Bruce will be discussing the small business CGT concessions in more depth at SMSF Professionals Day 2023 in Sydney on 8 June. To register for the event, please visit

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