09 May 066 Small business CGT amendmentsThe Treasurer has announced that the Government will implement all but one of the recommendations of the Board of Taxation’s post implementation review of the small business capital gains tax (CGT) concessions.
The Treasurer said that the amendments will ensure that the concessions are simpler, clearer and fairer. They will also reduce compliance costs for small business.
The Government will improve the operation of the small business CGT concessions by making changes to the maximum net asset value test (from $5m to $6m), the active asset test, the 15-year exemption, the retirement exemption, the small business roll-over, and how the concessions apply to partnerships.
In addition to these amendments, the Government will provide improved access to the concessions by replacing the current 50% controlling individual test with a more generous 20% significant individual test. The significant individual test will be able to be satisfied either directly or indirectly through one or more interposed entities.
These measures will apply to CGT events that happen in the 2006-07 and later income years.
For a copy of the Treasurer's press release No 38, 9 May 2006, go here
The Board's report is available on the Board’s website, here