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Unlocking Tax Benefits: Small Business Tax Relief Explained

Discover how the Income Tax Assessment Act (ITAA) empowers small businesses to reduce or defer capital gains and income taxes. Explore the Small Business CGT (SBCGT) concessions and Small Business Re-structure Rollover (SBRR) concessions, offering significant tax benefits since their inception.

SBCGT concessions can be used to reduce or defer capital gains whilst the SBRR concessions can be used to seamlessly move from one structure (eg sole trader) to another structure (eg company) without triggering capital gains or income tax liabilities whilst at the same time preserving the status of pre capital gains tax assets in the new business structure. The table below is a snapshot of the gateway conditions and tax attributes of the SBCGT concessions and the SBRR concessions.

General points	Small Business CGT concessions (SBCGT)	Small Business Restructure Rollover (SBRR)
Commencement date	21 September 1999	1 July 2016
Qualifying condition	$2 million turnover or, maximum net assets of not more than $6m	Not more than $10m turnover
Tax attributes	CGT is disregarded or deferred by using 15 year exemption, 50% active asset discount, retirement exemption and replacement asset rollover	All CGT and income tax is disregarded
Purpose of concession	Sale and/or replacement of CGT assets including retirement of principal of business	Re-structure of ongoing business (eg from sole trader to a corporate)
Effect on pre -CGT assets	Pre CGT status is lost	Pre CGT status of assets is preserved

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