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.

This session works through a series of practical issues accountants & advisers face including:

• The control rules that apply to companies, partnerships, fixed trusts and discretionary trusts;
• What the courts have said about applying the control tests to discretionary trusts;
• The special rules that can apply when the control percentage is between 40% and 50%;
• How to determine whether an entity is an affiliate of another entity;
• The special rules that apply to spouses and how this can make the difference between accessing the concessions and missing out altogether;
• How to determine whether someone is a significant individual or CGT concession stakeholder of a company or trust; and
• How different share classes can make life very difficult and what can be done about it.

What happens after the basic conditions have been satisfied? This webinar 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.

This session includes:

• How to determine whether an event happens in connection with someone's retirement for the 15 year exemption;
• What assets qualify as replacement assets under the small business rollover rules;
• Options for dealing with the tax liability that might be triggered when the small business rollover expires;
• How to extract exempt capital gains from a company or trust in a tax efficient manner;
• Strategies that can be considered when clients are approaching age 55; and
• Utilising the lifetime CGT cap within the super contribution rules.

A number of basic conditions 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 webinar is to ensure that practitioners are comfortable working through the various tests to know what information needs to be gathered and analysed.

Some of the specific issues we explore include:

• Applying the active asset test to assets that are used for mixed purposes;
• Determining whether shares in a company or units in a trust are active assets;
• The extra tests that need to be met when dealing with shares in a company or units in a trust;
• Dealing with connected entities and affiliates when applying the basic conditions;
• What assets and liabilities need to be taken into account under the $6m net asset value test;
• When the $2m turnover test can be used by a taxpayer holding passive assets; and
• The CGT concession stakeholder test and 90% test explained in plain English.