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  • Writer's pictureMohamed Radwan

Selling your Business ?, Understand what CGT Concessions available for you

The CGT concessions for SBEs are contained in Division 152. For the concessions to apply to a taxpayer on the disposal of business assets, the taxpayer must first satisfy the basic eligibility conditions in s. 152-10. Broadly, these basic conditions require that the following:

• Condition 1 – A CGT event happens in relation to a CGT asset.

• Condition 2 – Apart from Division 152, the CGT event would have resulted in a capital gain.

• Condition 3 – The taxpayer is either: – a CGT SBE for the income year, or – satisfies the maximum net asset value test, or – is a partner in a partnership that is a CGT SBE for the income year and the CGT asset is an interest in an asset of the partnership. Alternatively, the asset is a qualifying passive asset.

• Condition 4 – The CGT asset satisfies the active asset test.

• Condition 5 – If the CGT asset is a share in a company or an interest in a trust, the taxpayer satisfies the additional basic conditions.

If the basic eligibility conditions are satisfied, the next step is to consider the four small business CGT concessions that are available, which are the:

• 15-year CGT asset exemption (Subdivision 152-B).

• 50% reduction (Subdivision 152-C).

• Retirement exemption (Subdivision 152-D).

• Rollover relief (Subdivision 152-E).

The four CGT concessions are subject to further specific eligibility conditions. Where these are satisfied, the SBE taxpayer can apply the particular concession.

Please contact the team at MAR advisory Chartered Accountants to discuss it further

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