Small businesses with an annual turnover less than $2 million may be able to access a range of tax concessions. This applies whether you operate your business as a sole trader, partnership, company or trust.
You need to work out whether your business is eligible for the concessions generally. Then you can choose one or more of the tax concessions that suit your business and check your specific eligibility. You should also check whether you are eligible each tax year.The following income tax concessions may apply:
- small business and general business tax break
- simplified trading stock rules
- simplified depreciation rules
- immediate deductions for prepaid expenses
- entrepreneurs tax offset
- two-year amendment period.
- Car parking and FBT concession
- GST cash accounting
There are four capital gains tax (CGT) concessions you may be eligible for:
CGT 15-year exemption
If you are aged 55 or older and retiring or are permanently incapacitated, and your business has owned an asset for at least 15 years, you won’t pay CGT when you sell the asset.
CGT 50% active asset reduction
If you’ve owned an asset to conduct your business (an ‘active asset’) you’ll only pay tax on 50% of the capital gain when you sell the asset.
CGT retirement exemption
There is CGT exemption on the sale of a business asset, up to a lifetime limit of $500,000. If you are under 55, money from the sale of the asset must be paid into a complying superannuation fund or a retirement savings account.
CGT rollover
If you sell a small business asset and buy a replacement asset or improve an existing one, you can defer your capital gain until a later year.
There are conditions that need to be passed to ensure business owners are able to meet the criteria for concession.
If you require assistance, please contact us on (02) 8264-0755
All representations and information on this site is general in nature and should not be relied upon as advice. If you require specific advice please contact us.