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12 March, 2025
About small business CGT tax concessions
First Financial Team
Walking away from a business you built from the ground up is never simple, but the right strategy can turn the sale into a major financial advantage. Australia’s small business CGT tax concessions are among the most generous, allowing eligible business owners to significantly reduce or even eliminate capital gains tax.
At First Financial, we help clients retire with the financial security to support their ideal lifestyle.
Many small business owners rely on us to prepare for this transition.
While this article outlines small business CGT concessions and eligibility criteria, working closely with your accountant and financial adviser is essential to making the most of these opportunities.
Understanding small business CGT concessions
Small business capital gains tax (CGT) concessions are a set of tax relief measures designed to reduce or eliminate the capital gains tax payable when selling a business. These concessions apply to eligible small business owners and can significantly impact the financial outcome of a sale, particularly for those planning for retirement.
The primary aim of these concessions is to support small business owners by easing the tax burden when they exit their business. Beyond tax reductions, they offer opportunities to reinvest a significant portion of the proceeds into superannuation, helping to ensure long-term financial stability.
Key eligibility criteria
The Turnover Test is used to assess eligibility for various tax concessions, with thresholds varying depending on the concession. For small business CGT concessions, a business qualifies if its aggregated annual turnover is less than $2 million. This includes income from connected entities and affiliates, so business structures can impact eligibility.
The Net Asset Test applies if total net assets, including those of related entities, do not exceed $6 million. While personal assets like the family home and superannuation are excluded, business-related assets such as investment properties and shares may be counted.
Meeting either of these tests is a key step in accessing CGT concessions, but additional conditions may apply.
The 15-year ownership exemption
For long-term business owners, the 15-Year Exemption provides the most impactful tax relief under the small business CGT concessions. No assessable capital gain applies when selling a business asset, provided you have owned it for at least 15 years, are over 55 and are selling due to retirement or permanent incapacitation. In other words, you can sell entirely capital gains tax-free under these circumstances.
In addition, owners can contribute over $1 million from the sale into superannuation without affecting their concessional and non-concessional contribution caps.
This exemption recognises the years of investment, risk and personal effort involved in building a small business. Since many owners rely on the sale to fund their retirement, this concession helps ensure they aren’t burdened with heavy taxes upon exit.
Other small business CGT concessions
For business owners who don’t qualify for the 15-Year Exemption, other CGT concessions can still provide significant tax relief.
The Retirement Exemption allows up to $500,000 of capital gains to be disregarded if used for retirement. Business owners under 55 must contribute the amount to superannuation to receive the exemption.
The Rollover Relief provision defers CGT if the sale proceeds are reinvested into another active business asset within two years, giving owners more flexibility in their next venture.
Talk to the retirement planning experts
Selling a business is a major financial decision, and the right approach can make a significant difference to your future. Small business CGT concessions provide opportunities to reduce tax, but they also come with complexities that require expert guidance.
If you are a small business owner, a well-planned exit strategy ensures you don’t miss out on valuable benefits. Engaging both an accountant and a financial adviser early will help you navigate the process, structure your wealth effectively and set yourself up for the next stage of life.
To learn more about small business CGT concessions and whether they’re the right strategy for you, speak with a member of our friendly team at First Financial today.
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CLIENT STORY
Jan
Life Stage:
Retired
Background:
Jan's husband managed the finances until entering aged care. Jan gradually stepped into the financial picture with First Financial’s support.
- Needed financial guidance after business sale
- Lacked experience managing complex finances
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“The money just comes in. I don’t have to think about it. And I know they’re always there. They’ve always been there in the background, just quietly making things work.”
CLIENT STORY
John
Life Stage:
Retired business owner
Background:
After decades of running a successful pharmacy, John sought financial guidance to simplify decision-making and support long-term planning.
- Navigated the sale of a long-held business
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“I feel genuinely supported by First Financial. I can ask anything, and there’s no pressure, just clear advice and real care. The money’s growing, I’m not stressed about it, and I feel completely at ease for the first time. I don’t miss work, but I’d miss the support I get from First Financial.”
CLIENT STORY
Graeme and Craig
Life Stage:
Retired and semi-retired
Background:
Referred by friends helped through aged care, Craig sought secure financial guidance after inheriting funds.
- Invest inheritance securely without high risk
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“We feel very secure with First Financial, the income just comes in, and we know everything is being looked after. It’s not just safe, it’s smart. We’ve recommended them to others because we genuinely believe in the team.”
CLIENT STORY
Larry and Virginia
Life Stage:
Newly retired
Background:
As retirement neared, Larry and Virginia were ready to enjoy travel, family, and freedom, without uncertainty. A friend recommended First Financial, and from the first meeting, they had a clear plan, a safety net, and people they trusted.
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“We’ve travelled the world, Europe, Sri Lanka, Vietnam, without once stressing about the money. They made everything feel simple and gave us the confidence to live well. We feel secure because we know exactly where we stand, and that peace of mind means everything.”
CLIENT STORY
Tim and Adam
Life Stage:
Early retirement and working professional
Background:
When Tim received an overseas medical settlement, he and Adam had just 14 days left in a 90-day window. They needed clear guidance, fast. A referral led them to First Financial.
- Only two weeks left to meet urgent legal and financial deadlines
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- Managed every moving piece, from legal documents to super rollovers
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“We’re in totally different life stages, but First Financial built a strategy that supports us both. From urgent legal steps to ethical investing, they handled every detail with calm, care, and real expertise. It’s financial freedom without compromise, and we couldn’t have done it without them.”
CLIENT STORY
Lyn
Life Stage:
Retired widow
Background:
Lyn stepped into financial management for the first time after her husband's passing. With patience and care, First Financial supported her through grief, learning, and empowerment.
- Had never managed finances before
- Was overwhelmed after her husband’s passing
- Needed plain-English explanations and patience
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- Remained a trusted constant through major transitions
“After my husband passed, I was completely unsure where to start. First Financial gave me the space to learn, to ask questions, to grow confident. They drew a diagram that I still have. And now, I sleep well at night knowing I’ve got someone in my corner.”
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