Capital Gains
7. Small Business Entity Test
Last updated: 03 Jul 2015
- A small business is an entity that carries on a business and has an annual aggregate turnover of less than AU$2 million. An entity can be an individual, company or trust.
- An entity will also be a small business entity for the purposes of the CGT concessions if another entity that is connected with the first entity or is an affiliate of the first entity is a small business entity and the relevant asset is used entirely in the business of the second entity.
- An entity’s aggregated turnover for an income year is the sum of the turnover of:
- the entity;
- its connected entities; and
- its affiliates.
- The calculation of aggregate turnover does not include:
- salaries;
- wages;
- capital gains;
- dividends;
- interest; and
- trust distributions.
- Only gross income is included in the calculation and only GST exclusive amounts.
- If the entity carries on more than one business the income of all businesses must be included when calculating the aggregate turnover of the entity.
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