Selling a business

Could the small business
CGT concessions apply?

Four concessions sit behind one set of gates in Division 152. This checker walks the gates in order and tells you plainly where the answer is yes, no, or genuinely not decidable without a person.

Before you start

Turnover and net asset value both count connected entities and affiliates, not just the entity making the sale. If a spouse, family trust or related company is in the picture, your figures are probably larger than you think — say so below and we will flag it rather than guess.

The sale

Are you making a capital gain on the sale?

The concessions apply to a gain. A loss is treated differently — and is still worth a conversation.

What is being sold?
Who owns the asset?

The size test

Including connected entities and affiliates. Under $2m passes this limb.

$

Including connected entities and affiliates. Not exceeding $6m passes this limb. Either limb is enough.

$
Is there a spouse, family trust, related company or business partner involved?
Do you own it yourself, but the business using it is run by your company, trust or partnership?

For example, the premises are in your name and your family company trades from them. This is a recognised way into the concessions, not a problem, but it has its own conditions.

The asset itself

From acquisition to the sale.

Active for at least half the period, or 7.5 years where owned more than 15.

Has any part of it ever been leased to anyone other than you?

Including to your own company or trust. Using it yourself is not a lease. Even part of it, even briefly, counts: this is the most common reason a claim fails on ATO review.

Was there any non-business use of more than 12 months?
Was it acquired before 20 September 1985?

Structure and timing

Any change to shareholding, units, the deed or distributions in the last 12 months?
Is any part of the price contingent on future events, or payable in a later year?

An earnout.

Is this a partnership asset or an interest in a partnership?

The retirement exemption

Are you looking at the retirement exemption?

The four concessions

15-year exemption (Subdiv 152-B)
Where the asset has been owned for at least 15 years and the conditions are met, the whole gain can be disregarded. It is tested first, because it makes the others unnecessary.
50% active asset reduction (Subdiv 152-C)
Halves the gain remaining after any general CGT discount.
Retirement exemption (Subdiv 152-D)
Up to $500,000 per CGT concession stakeholder across a lifetime. Amounts for anyone under 55 must be paid into super, inside a strict window.
Small business rollover (Subdiv 152-E)
Defers the gain where a replacement asset is acquired within two years.