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Bell v FCT: Uncertainties in the small business CGT concessions


The small business capital gains tax concessions in Div 152 of the Income Tax Assessment Act 1997 are widely utilised by taxpayers who are disposing of their businesses. Two recent cases in the Federal Court, FCT v Byrne Hotels Qld Pty Ltd and Bell v FCT, have, however, caused some uncertainty about the application of the concessions.

This article examines the implications of these cases. In the author’s view, the Byrne Hotels case has expanded the scope of the liabilities that can be included in the maximum net asset value (MNAV) test to some contingent liabilities, but leaves some uncertainty as to the precise types of contingent liabilities that can be included in the MNAV calculation. Bell’s case was unable to resolve this uncertainty due to the abandonment of the issue on appeal. Practitioners should be aware of the complexities with contingent liabilities when utilising the small business CGT concessions.

Author profile

Dr Philip Bender ATI
Philip is a barrister at the Victorian Bar practising in federal and state taxation and superannuation. He acts for both taxpayers and revenue authorities and has appeared in a number of leading cases in these fields. Philip is also the author of Bender’s Australian Stamp Duties, a book published by The Tax Institute dealing with stamp duty in all Australian jurisdictions. - Current at 26 June 2019
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