Capital Gains Tax (CGT) International tax & business 2013

The old, the new, and the ugly: A comparative analysis of the UK, South African and Australian CGT small business concessions - with recommendations for Australia

Source: Australian Tax Forum Journal Article

Published Date: 1 Jul 2013


Australia’s CGT small business concessions have long been recognised as a problematic area of tax policy. Introduced and steadily expanded for the avowed purpose of assisting Australian small business, these concessions have reached levels of generosity and complexity that alarm both taxation practitioners and academics.

This paper conducts a three-way comparative analysis of the relevant CGT provisions in Australia, the United Kingdom and South Africa with a view to identifying possible improvements from the example of other jurisdictions. To this end, CGT business concessions from each country are compared and evaluated against the widely accepted criteria of good tax policy. While it is shown that certain concessions may be fairly and constructively extended to this sector, the comparative analysis reveals the extent of inequity and inefficiency generated by Australia’s current raft of concessions. Proposals for reform include relaxation of the Active Asset Test to ensure that the concessions are available to all business assets and removal of both the 15-year Exemption and the 50% Active Asset Discount in the interests of equity and efficiency. It is further recommended that the remaining concessions be extended to all businesses regardless of size, as done in the United Kingdom. Rationalisation of the concessions in this manner will enhance simplicity and remove many inequities and economic distortions that currently exist.


Sorry, this is subscriber only content.

To gain access to this material and much more - Subscribe Now.

(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).

Already a Subscriber? Login now

Already a Subscriber? Login now


The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.

Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.

The Tax Institute
(ABN 45 008 392 372 (PRV14016))


The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009. 

Copyright Statement

All materials provided on this site are protected by copyright and are owned by or licensed to TTI.

Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.


Capital Gains Tax (CGT) International tax & business 2013

Share this page