Small Business CGT Concessions Web Series

Before applying the basic conditions to access the small business CGT concessions, it’s important to work through the various grouping rules. Understanding these rules is vital as they can have a significant impact on whether an asset can pass the active asset test, whether a taxpayer can pass the $6m net asset value test, and whether a taxpayer can pass the $2m turnover test.

We also explain the concepts of a significant individual and CGT concession stakeholder and what this means in practice. These are relevant whenever a company or trust wants to apply the retirement exemption or 15 year exemption or whenever a taxpayer is selling shares in a company or units in a trust.

What happens after the basic conditions have been satisfied? This session works through the extra conditions that must be met to apply specific concessions and discusses strategies to maximise the tax outcome for clients.

The rules contain strict requirements dealing with the extraction of capital proceeds from a company or trust that has made a capital gain. We address the practical issues that need to be considered and opportunities for extracting the funds in the most tax efficient manner.

There are a number of basic conditions that need to be satisfied in order to access the small business CGT concessions. Unless these conditions can be satisfied, clients cannot utilise the concessions to reduce their capital gains.

This is where a lot of mistakes are made and where the ATO often focuses its audit and review activities when assessing claims made under the small business CGT concessions.

The aim of this session is to ensure that practitioners are confident working through the various tests and understand the information that needs to be gathered and analysed as part of this process.

When clients are able to access the small business 15 year exemption or retirement exemption there might be an opportunity to take advantage of the lifetime CGT cap rules for superannuation contributions. This session explores how these concessions interact with superannuation and the planning opportunities available.

Some clients will be compelled to contribute exempt gains to super while other might choose to on a voluntary basis. Either way, these clients might be able to access the lifetime CGT cap rules and ensure that these contributions do not count towards their normal contribution caps. However, the process needs to be managed very carefully.