Capital Gains Tax

Capital Gains Tax (CGT) is a tax levied on the increase in value of assets when a Capital Gains Tax event occurs.

A CGT event can include the sale of a property, sale of shares, transfer of shares or property to relatives or children, when a person leaves Australia permanently and a range of other scenarios.

There are CGT concessions which you may be eligible for, including:

  • Principal place of residence exemption – capital gains tax will not apply to your main residence when you sell it
  • 50% general CGT discount – if you own an asset for over 12 months you will be eligible for a 50% reduction of the capital gain on disposal of that asset

If you are not a tax resident of Australia, you may not be eligible for the above CGT concessions.


Furthermore, small businesses may be eligible for the following concessions:

  • 15-year exemption – if you are aged 55 or older, are retiring or are permanently incapacitated and have owned an active business asset for at least 15 years
  • 50% active asset reduction – if you’ve owned an active business asset, you may be eligible for a 50% reduction of the capital gain on disposal of that asset
  • Retirement exemption – this is a CGT exemption on the sale of an active business asset, if the funds from the proceeds of the sale are paid into a complying superannuation fund, with a lifetime limit of $500,000
  • Rollover – if you dispose of an active business asset, you can defer your capital gain until a later year if you buy a replacement asset

There is the potential you will not have to pay tax on the sale of your business, or that the capital gains tax will be significantly reduced using the above concessions.

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