If you’re running a small business and planning to sell an asset – such as a part of your business or a property used in it – there’s some good news: you may be eligible for up to four CGT (capital gains tax) concessions that could significantly reduce, or even eliminate, the tax you need to pay on the gain.
These concessions are designed to support genuine small business owners, and they can make a real difference when managing your financial outcomes, especially during a sale or restructuring.
The way you report these concessions depends on your business structure.
- If you’re a sole trader or in a partnership, you’ll report them in the supplementary section of your individual tax return.
- If you’re operating through a company or trust, the details must be included in a CGT schedule attached to your tax return.
The Australian Taxation Office (ATO) is focusing on ensuring that only genuinely eligible businesses claim these concessions. That means it’s more important than ever to apply them correctly.
Before claiming any CGT concessions, make sure you:
- Understand the eligibility rules, including whether your business qualifies as a genuine enterprise (not a hobby)
- Check that your aggregated turnover is under $2 million or that your net business assets are less than $6 million
- Ensure you meet any age or retirement conditions, where applicable
- Accurately calculate and report your net capital gain or loss
Common Pitfalls To Avoid
Some frequent mistakes include:
- Misunderstanding eligibility, especially around business turnover or asset thresholds
- Using incorrect dates when calculating ownership periods
- Applying rollover relief or the 50% CGT discount incorrectly
- Failing to use the correct concession codes when completing tax returns
These rules can be complex, but you don’t need to navigate them alone. If you’re considering selling a business asset or even planning ahead, let’s sit down and work through your eligibility and options together.
We’re here to help you get the best outcome this financial year while staying fully compliant. Contact us if you’d like to chat about how the CGT concessions might apply to your business and how we can help you going forward.
