Small Business CGT Concessions & Super

By Daniel Butler & Claire Malone

The CGT small business concessions allow members to get an extra $1.1 million each into super. This can be a great way to boost retirement savings given the contribution limits now in place.

Furthermore, these concessions can also be used in conjunction with an asset protection strategy. For example, transferring business real property (‘BRP’) to an SMSF can allow business owners to take advantage of the CGT concessions and boost their retirement savings with the further advantage of long-term asset protection offered by SMSFs.

15 year v retirement exemption

Advisers should think carefully about which of the concessions are available to their clients. For example, will they qualify for the 15 year or retirement exemptions, and what are the advantages of each?

15 year exemption	retirement exemption
capital proceeds can be contributed into super	only the net capital gain may be contributed
up to $1.1m proceeds can be contributed	up to $500,000 net gain can be contributed
entire capital gain can be disregarded	up to $500,000 net gain can be disregarded
only available to those aged 55 years or over (unless permanently incapacitated)	potentially available to those under 55 years
must be in connection with ‘retirement’ (unless permanently incapacitated)	no need to retire (despite the name ‘retirement exemption’!)
asset must have been continuously owned for at least 15 years	no requirement as to period of ownership
if asset owned by a company or trust, must have had a ‘significant individual’ for a total of at least 15 years	if asset owned by a company or trust, must have had a ‘significant individual’ but only at time of the CGT event
can apply to a pre-CGT asset	only applies to post-CGT assets

Daniel Butler and Claire Malone are lawyers with DBA Lawyers Pty Ltd.

Small Business CGT Concessions & Super

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By Daniel Butler & Claire Malone