In order to access any of the concessions, the taxpayer must first satisfy the basic conditions set out in Subdivision 152-A. Some conditions require further tests to be passed but all, at a minimum, require these basic conditions to be met;
- A CGT event must happen in relation to a CGT event (except K7) of the taxpayer and this CGT event must result in a capital gain (so is not relevant to assets acquired before 20 September 1985).
- The taxpayer satisfies at least one of the following;
- The taxpayer is a ‘small business entity’
- The taxpayer satisfies the ‘maximum net asset value test’
- The taxpayer is a partner in a partnership that is a small business entity and the CGT asset is an interest in an asset of the partnership or
- The conditions in s 152-10(1A) or (1B) are met. I’ll explain these later.
- If the CGT asset is a share in a company or an interest in a trust then further conditions to do with ‘CGT concession stakeholders’ are met.
In my next post we’ll start to get stuck in to the details, first looking at how a taxpayer can be a ‘small business entity’. Spoiler alert – it’s all about having turnover of less than $2m but as you’d expect there’s a bit more too it than that.