Capital Gains
5. Small Business Eligibility
Last updated: 01 Jul 2015
- Determining whether you are eligible for small business CGT concessions requires analysis of whether you satisfy a number of tests. These are only the basic tests and there are additional requirements depending on the type of concession sought.
- Analysis can be complicated by the type of business structure your asset is held in and what sort of concession is being sought.
- In partnerships for example the small business entity test will be satisfied:
- if you are a partner in a partnership; and
- the asset in question is a partnership asset rather than an asset owned by you; and
- the asset is used in the business of the partnership; and
- the partnership is a small business entity.
- You may be entitled to the concessions even if the asset is owned by you if it is used in a partnership in which you are a partner and the partnership is a small business entity. Here it is relevant to be aware of the extent to which the asset is used in the business of the partnership.
- If you own shares in companies or have interests in trusts you may be entitled to small business CGT concessions when you dispose of the shares or trust interests.
- Generally small business CGT concessions will be available if you satisfy the following basic tests:
- he maximum net asset value test; or
- the small business entity test; and
- the active asset test for the asset producing the capital gains.
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