As a business owner, selling your business is the final step in a long journey. It’s not just a financial transaction—it’s often the point where years of work are converted into retirement savings, investment funds, or simply the freedom to move on.
But one thing that can make a huge difference to the outcome is how well you plan for the tax side of the sale. This is where the Capital Gains Tax (CGT) small business concessions come in—and why it’s so important to speak with your adviser early in the process.
What Are the Small Business CGT Concessions?
The small business concessions are a set of tax reliefs designed to help business owners keep more of the proceeds when they sell. If you qualify, they can reduce or even eliminate the capital gains tax you’d otherwise pay.
The main concessions include:
- 15-year exemption – if you’ve owned your business for at least 15 years and are over 55 and retiring, you may be able to disregard the entire capital gain.
- 50% active asset reduction – a 50% discount on the gain from selling a business asset, depending on your corporate structure.
- Retirement exemption – up to $500,000 of capital gains can be disregarded if the proceeds are used for retirement (in some cases, paid into super).
- Rollover concession – allows you to defer the gain if you reinvest in another business or asset.
Used properly, these concessions can mean a much better financial result from your sale.
Why Early Advice Matters
Eligibility depends on a number of factors: the size of your business, how it’s structured, and how long you’ve owned it. Restructuring at the last minute isn’t always possible, so speaking with your accountant well before a sale is critical.
Early planning ensures:
- You know which concessions you may qualify for
- Your business is structured to make the most of them
- You’re not caught out by strict timing or ownership rules
The Bottom Line
Selling your business is about more than finding a buyer. It’s about making sure you keep as much of the proceeds as possible. The small business concessions can be incredibly valuable, but they require foresight. By involving your adviser early, you’ll be in the best position to take full advantage when the time comes to sell. The earlier you start planning, the better positioned you’ll be to achieve the outcome you want.
