Capital Gains Tax Improvements

What Is Happening with CGT?

On 9 May 2017, the Australian Government made the announcement that they would be making changes to small business capital gains tax (CGT) concessions. The proposed amendments will ensure that these concessions are only able to be accessed in relation to assets that are used in a small business, or that relate to small business ownership interests. These concessions have been developed in order to assist in providing relief from capital gains tax to small business owners. This may also result in greater contributions to retirement savings when the business is sold.


Some taxpayers may be able to access the CGT concessions if they have some small business running which has interests in another big business not related to their small business. For instance, when a tax payer is arranging for their ownership interests in larger businesses, they may not have to take this into account of those assets when determining if they are eligible for the concession.


Small business CGT concessions will be tightened to deny eligibility for assets which are unrelated to the small business. For instance, if you have interest in a big business (aggregated  turnover is more than 2 million, or the business assets is more than 6 million), you will not be eligible for the CGT concessions when you sell the interest of the business and make a capital gain from the transaction.

What Is the Criteria for Eligibility?

The CGT concessions that are currently available for small business will remain available to those who have an aggregated turnover of less than $2 million or if their business assets do not exceed $6 million (in that particular small business only).

When Is This Change Occurring?

The new CGT concession measures will take effect from the start of the new financial year, 1 July 2017. This means the changes are already in effect. Small businesses should check to see how this tightening of the rules and eligibility may possibly affect them.

Why Is This Happening?

The government is looking to tighten laws around CGT concessions due to their belief that many business owners are currently claiming things they shouldn’t be. The government hope that these changes will result in the increased integrity of Australia’s taxation laws.


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