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Capital Gains Tax Concessions on Your Business Sale

When selling a business in Australia, understanding and utilising Capital Gains Tax (CGT) concessions can significantly reduce your tax liabilities and enhance your financial outcomes.


HelloLedger is here to guide you through the complexities of CGT concessions, ensuring you take full advantage of these opportunities to reduce the tax impact of your sale.

CGT concessions for small businesses can be highly beneficial, offering significant tax relief in the context of selling a business or business assets.


These concessions are designed to support small business owners by allowing them to reinvest in their businesses or retirement.

Navigating the eligibility criteria and application of CGT concessions requires careful planning and expert advice. HelloLedger’s tax professionals are equipped to help you understand your eligibility, ensure compliance with all requirements, and maximise the concessions available to you.

Are you considering selling your business or wondering how to manage the potential capital gains?


Contact HelloLedger to schedule a consultation. We’ll help you navigate the CGT concessions effectively, ensuring you get the most out of your business sale.

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Key Aspects of CGT Concessions

CGT concessions involves several critical aspects:

Basic Eligibility

To be eligible for any of the CGT concessions, you must first meet the basic eligibility conditions including either being an eligible CGT Small Business Entity with an aggregated turnover of less than $2 million, not running a business (other than as a partner) but your asset is used in your affiliate or connected entities business or meeting the maximum net asset value test. The asset must also be an active asset. Further tests apply to shares in a company or interest in a trust or where a CGT event relates to a partnership.

15-Year Exemption

If you have owned your business for at least 15 years and are retiring or permanently incapacitated, you may be eligible for a complete exemption from CGT on the sale of the business.

50% Active Asset Reduction

This concession allows you to reduce the capital gain on an active business asset by 50%, provided the asset has been actively used in the business.

Retirement Exemption

Capital gains from the sale of business assets up to a lifetime limit of $500,000 can be exempted from CGT. If you are under 55, the exempt amount must be contributed to a complying superannuation fund.

Rollover Relief

If you sell a business asset and buy a replacement asset or make improvements to an existing one within certain time frames, you can defer your capital gain until the disposal of the replacement asset.

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Why Utilise the CGT Concessions?

Taking advantage of CGT concessions can drastically reduce the amount of tax you pay on the sale of your business, providing more capital for your next venture or retirement.


Properly applied, these concessions can enhance your financial freedom and provide substantial long-term benefits.

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CGT Concessions on the Sale of Your Business FAQs

  • What are CGT concessions?

  • CGT concessions are tax reliefs that allow eligible small business owners to reduce or sometimes eliminate the capital gains tax incurred from the sale of a business asset. These concessions are designed to help small business owners reinvest in their businesses or secure their retirement.

  • What types of CGT concessions are available?

  • There are four main types of CGT concessions available for small businesses: the 15-Year Exemption, the 50% Active Asset Reduction, the Retirement Exemption, and the Rollover Relief. Each serves different purposes and has specific eligibility criteria.

  • What is the 50% Active Asset Reduction?

  • This concession allows you to reduce the capital gain on an active business asset by 50%. It can be used in conjunction with other concessions for even greater tax relief.

  • What is Rollover Relief, and how can it be applied?

  • Rollover Relief allows you to defer your capital gain from the sale of a business asset for two years, or longer if you acquire a replacement asset or make capital improvements to an existing asset. This can be particularly useful if you are reinvesting in your business.  The replacement asset period starts one year before the last CGT event in the income year for which you obtained the roll-over; it ends at the later of 2 years after the last CGT event,

  • Who is eligible for CGT concessions?

  • Eligibility for CGT concessions generally requires you to be a small business with an aggregated annual turnover of less than $2 million, or your business assets must not exceed $6 million in value. Additionally, the assets must be active and used in the running of the business.


  • How does the 15-Year Exemption work?

  • The 15-Year Exemption completely exempts any capital gain from CGT if you have owned the business asset for at least 15 years and are aged 55 or older and retiring, or if you are permanently incapacitated.

  • Can I use the Retirement Exemption if I am not retiring?

  • Yes, the Retirement Exemption is available even if you are not retiring. However, if you are under 55 years old, the exempted amount must be paid into a qualifying superannuation (retirement) fund.

  • Are there any limits to how much I can claim with these concessions?

  • Yes, the Retirement Exemption has a lifetime limit of $500,000 in capital gains that can be exempted. There are no specific limits for the 15-Year Exemption or the 50% Active Asset Reduction, but all claims must meet the relevant criteria.

  • Can CGT concessions be combined when selling my business?

  • Yes, multiple CGT concessions can often be combined to maximise tax benefits when selling your business. For instance, you might apply the 50% Active Asset Reduction to reduce the capital gain initially, then use the Retirement Exemption for further reduction, provided all eligibility criteria are met for each concession.

  • What happens if my business assets are jointly owned?

  • If business assets are jointly owned, each owner can potentially claim CGT concessions on their share of the asset, provided each individual meets the eligibility criteria independently. This is common in partnerships where each partner's situation might vary.

  • Are there any specific records I need to maintain to qualify for CGT concessions?

  • To qualify for CGT concessions, you must maintain detailed records that prove your eligibility and support the calculations of any capital gain or concession claimed. This includes records of asset purchase and sale dates, costs, elections for concessions used, business usage percentages, and any other relevant financial statements.

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Contact us at HelloLedger and let’s embark on the journey to financial clarity and success together.

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