The small business CGT concessions are a set of four concessions in Division 152 of the Income Tax Assessment Act 1997 (Cth) that can substantially reduce or eliminate capital gains tax on the sale of an active business asset by an Australian small business. The four concessions are the 15-year exemption, the 50% active asset reduction, the retirement exemption (lifetime limit of $500,000 per individual), and the small business rollover.
To qualify, the seller must satisfy either the $2M aggregated turnover test or the $6M maximum net asset value test, plus additional asset-specific requirements including the active asset test. Eligibility is fact-specific and should be assessed by a specialist before signing the term sheet.