Extra conditions for CGT concessions

Businesses are eligible for the small business capital gains tax (CGT) concessions, provided they satisfy several conditions that are common to all concessions. 

However, the ATO has recently introduced additional conditions you must meet to be eligible when an asset is a share in a company or an interest in a trust. 

Additional conditions are as follows: 

  • Immediately before the CGT event, CGT concession stakeholders in the company or trust must have a total small business participation percentage in the entity claiming the concession of at least 90 per cent . Otherwise, you must have been a CGT concession stakeholder in a company or trust. 

  • You must satisfy the maximum net asset value test or have carried on a business just before the CGT event. 

  • The company or trust must satisfy the maximum net asset value test or be a CGT small business entity for the income year. 

  • Your shares or interest must satisfy a modified active asset test. 

Taxation & AccountingCristy Houghton