The sale of a business can be among the most significant financial transactions in an individual’s lifetime, and tax laws related to the sale of a business may have a huge bearing on the net amount left in your bank account after such a sale. Small business CGT concessions in Australia are specifically aimed at reducing this effect, as long as the required criteria are satisfied. This guide walks through eligibility, the four available concessions, what changes from 2027, and the planning steps worth taking before you sign anything.
Small business CGT concessions are a series of tax exemptions under the tax laws of Australia that reduce or exempt the payment of capital gains tax for the disposal of active assets of a business by the owner of a small business. These concessions exist in addition to the general CGT laws but provide much better treatment, taking into consideration the fact that many owners keep their retirement money invested in their businesses instead of super or stocks. There are four different types of concessions.
The Australian Taxation Office (ATO) sets out specific eligibility requirements for accessing CGT concessions for small businesses. To qualify, a business owner must satisfy the relevant basic conditions as well as any additional requirements that apply to the particular concession being claimed.
Four exemptions make up the full suite of relief available under small business CGT 2026–27 rules, and each suits a different stage of business ownership.
Under the 15-year exemption, an eligible individual may disregard the entire capital gain from a qualifying CGT asset that has been continuously owned for at least 15 years, provided the relevant conditions are satisfied. Generally, the individual must be aged 55 or over and retiring, or permanently incapacitated, when the CGT event occurs.
Under this concession, eligible owners may exclude half of the capital gain if the asset is an active one. This concession is usually the easiest to qualify for, and it can be combined with the other concessions.
The CGT retirement exemption allows gains of up to $500,000 over a lifetime to be disregarded. Owners under 55 must contribute the exempt amount into superannuation, while those 55 and over can take the funds without this requirement.
The small business rollover can allow an eligible capital gain to be deferred when the business owner acquires a replacement active asset or makes eligible improvements to an existing asset. Specific timing and eligibility requirements apply, so the rollover should be planned carefully before and after the CGT event.
Applying these concessions correctly during a sale involves a specific sequence, and understanding that order helps avoid costly missteps around CGT when selling a business.
The structure holding your business, whether a sole trader arrangement, partnership, company or trust, changes how these concessions flow through to the individual owner, which is why business structure advice matters well before a sale is on the table.
| Structure | Key consideration |
| Sole trader | Concessions apply directly to the individual owner. |
| Partnership | Each partner applies concessions to their share of the gain. |
| Company | The company can access concessions, but distributing proceeds to shareholders needs separate planning. |
| Trust | The trust must make a valid choice and payment to the relevant individual to pass concessions through. |
Proper business transition planning is important for the best outcomes. It works best when it starts years, not months, before a sale. Here are some important steps to follow across different phases of the sale:
Seeking professional financial advisory services in Perth can help business owners plan the sale, understand their tax position and prepare for the transition.
The 2026–27 Federal Budget proposes significant changes to the general CGT rules from 1 July 2027. Under the proposed reforms, the general 50% CGT discount for individuals, trusts and partnerships would be replaced with a cost-base indexation approach, together with a proposed minimum 30% tax rate on net capital gains.
Importantly for small business owners, the four small business CGT concessions are proposed to remain available. The proposed reforms would also increase the aggregated turnover threshold for the 50% active asset reduction from $2 million to $10 million from 1 July 2027.
Business owners considering a sale around this period should therefore review the timing and potential tax consequences with a qualified tax professional before entering into a sale agreement.
Even well-intentioned sellers can trip up on technical requirements, so it’s worth reviewing where business sale capital gains tax planning commonly goes wrong. Here are some of the common mistakes to keep in mind and avoid:
Working with a capital gains tax specialist accountant can help you avoid these mistakes and qualify for the concessions.
Given how many moving parts are involved, working with a capital gains tax specialist before you list your business for sale is one of the most valuable steps you can take. A qualified small business tax accountant can help confirm eligibility, calculate potential capital gains and assess which concessions may provide the most suitable outcome.
They can also help align your business tax planning with your retirement and reinvestment goals. Palladium Financial Group offers professional services for owners navigating exactly this kind of transition. Contact us now for proper guidance.
Also read: Director Penalty Notices Explained: What Small Business Owners Must Know in Australia?
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