{"id":17893,"date":"2026-06-11T15:33:23","date_gmt":"2026-06-11T10:03:23","guid":{"rendered":"https:\/\/befreeltd.com\/au\/?p=17893"},"modified":"2026-07-08T15:41:17","modified_gmt":"2026-07-08T10:11:17","slug":"capital-gains-tax-australia-guide","status":"publish","type":"post","link":"https:\/\/befreeltd.com\/au\/resources\/blogs\/capital-gains-tax-australia-guide\/","title":{"rendered":"Capital Gains Tax in Australia: A Plain-English Guide for Business Owners"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"17893\" class=\"elementor elementor-17893\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-a5527da e-flex e-con-boxed e-con e-parent\" data-id=\"a5527da\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-5368da1 elementor-widget elementor-widget-text-editor\" data-id=\"5368da1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>When you finally sell your business, dispose of a commercial property or exit a partnership, the Australian Taxation Office (ATO) will want a share of the profit. This is the Capital Gains Tax or CGT. For the 2026\/2027 financial year, CGT planning requires close attention. The Federal Government is introducing legislation effective from 1 July 2027 that changes the standard CGT discounts. However, the government has confirmed that the highly valuable \u2018Small Business CGT Concessions\u2019 are remaining in place.<\/p><p>If you understand how these concessions work and keep your financial records in strict order, you can legally reduce your CGT bill, in some cases, down to zero. Here is a plain-English guide to understanding how CGT works when selling your business, and how to protect your exit.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-8181c14 elementor-widget elementor-widget-heading\" data-id=\"8181c14\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Your Simple Guide to Business CGT \n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4929b77 elementor-widget elementor-widget-text-editor\" data-id=\"4929b77\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Before exploring the concessions available, it is important to remember that CGT planning starts long before a business is sold. Financial records, asset tracking, and entity reporting are critical in determining eligibility for reliefs and exemptions. Many Australian businesses engage with\u00a0<a href=\"https:\/\/befreeltd.com\/au\/services\/tax-outsourcing\/\">outsourced tax services<\/a>\u00a0to help manage complex tax obligations and prepare for future business exit events.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-84aff07 elementor-widget elementor-widget-heading\" data-id=\"84aff07\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Step 1: Understand What Triggers CGT\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-166f256 elementor-widget elementor-widget-text-editor\" data-id=\"166f256\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>You do not pay CGT simply because your business makes a profit from its daily trading. CGT is triggered by a specific &#8220;CGT event.&#8221; For a business owner, this means:<\/p><ul><li>Selling your shares in a company.<\/li><li>Selling the underlying assets of the business, such as the client list, goodwill or commercial premises. This is particularly relevant in\u00a0<a href=\"https:\/\/befreeltd.com\/au\/industries\/construction-and-real-estate\/\">construction accounting<\/a>,\u00a0where commercial property often represents a significant component of business value.<\/li><li>Transferring ownership to a family member or business partner.<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d1edb85 elementor-widget elementor-widget-text-editor\" data-id=\"d1edb85\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>The \u2018capital gain\u2019 is simply the difference between what it cost you to acquire the asset (your cost base) and what you received when you sold it.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0d1f349 elementor-widget elementor-widget-heading\" data-id=\"0d1f349\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Step 2: Check if You are Eligible for Small Business Concessions \n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-75485cf elementor-widget elementor-widget-text-editor\" data-id=\"75485cf\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\tYou have to show the ATO you&#8217;re a small business to qualify for the best tax relief. At least one of these two basic tests must pass:\n<ol>\n \t<li><strong>The Turnover Test:<\/strong>\u00a0Your business generates\u00a0<a href=\"https:\/\/www.ato.gov.au\/businesses-and-organisations\/income-deductions-and-concessions\/incentives-and-concessions\/small-business-cgt-concessions\/small-business-cgt-concessions-eligibility-conditions\/cgt-small-business-entity-eligibility\"target=\"blanl\"rel=\"nofollow\">less than $2 million<\/a>\u00a0in annual revenue.<\/li>\n \t<li><strong>The $6 Million Net Asset Test:<\/strong>\u00a0The total net value of all CGT assets owned by you, your business, and any connected entities is strictly\u00a0<a href=\"https:\/\/www.ato.gov.au\/businesses-and-organisations\/income-deductions-and-concessions\/incentives-and-concessions\/small-business-cgt-concessions\/small-business-cgt-concessions-eligibility-conditions\/maximum-net-asset-value-test\"target=\"blanl\"rel=\"nofollow\">under $6 million<\/a>\u00a0just before you sell. (Crucially, this excludes your personal family home and your superannuation balance).<\/li>\n<\/ol>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-95e259e elementor-widget elementor-widget-text-editor\" data-id=\"95e259e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Additionally, the asset you are selling must be an\u00a0Active Asset. This means it is actively being used to operate your business (for example, a warehouse or trade mark) instead of being a passive asset that pays rent or interest.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-987c8b1 elementor-widget elementor-widget-heading\" data-id=\"987c8b1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h3 class=\"elementor-heading-title elementor-size-default\">Step 3: Apply the Four Concessions\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-d69d5df elementor-widget elementor-widget-text-editor\" data-id=\"d69d5df\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>If you pass the eligibility tests in Step 2, you can look at the four specific Small Business CGT Concessions. You can often use more than one at the same time to reduce your tax bill:<\/p><ul><li><strong>The 15-Year Exemption:<\/strong>\u00a0The ultimate tax break. If you have owned the active asset continuously for 15 years, are aged 55 or older, and are selling because you are retiring or permanently incapacitated, you pay zero CGT.<\/li><li><strong>The 50% Active Asset Reduction:<\/strong>\u00a0If you do not qualify for the 15-year rule, you can simply cut the capital gain on an active asset in half.<\/li><li><strong>The Retirement Exemption:<\/strong>\u00a0You can exempt up to a lifetime limit of $500,000 in capital gains. Despite the name, you do not have to actually retire to use this. However, if you are under 55, the tax-free money must be deposited directly into your superannuation fund.<\/li><li><strong>The Small Business Roll-Over:<\/strong>\u00a0This does not eliminate the tax, but it delays it. If you sell an active asset and use the money to buy a new active asset (or improve an existing one) within a set timeframe, you can defer paying the CGT until you sell the new asset.<\/li><\/ul>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1fede95 elementor-widget elementor-widget-heading\" data-id=\"1fede95\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Why Clean Bookkeeping is Your Best Defence\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3c9c8a4 elementor-widget elementor-widget-text-editor\" data-id=\"3c9c8a4\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>The ATO scrutinises small business CGT claims closely because they represent a massive reduction in tax revenue. The most common reason business owners miss out on these concessions is poor record-keeping.<\/p><p>The $6 million net asset test is a strict cliff-edge. If your company ledgers are outdated, intercompany loans are not reconciled, or depreciating assets are not written down correctly, your net asset value will appear artificially high on paper. Being just a few thousand dollars over the $6 million limit completely disqualifies you from the concessions; this is why\u00a0<a href=\"https:\/\/befreeltd.com\/au\/services\/bookkeeping-outsourcing\/\">outsourced bookkeeping solutions<\/a>\u00a0are important.\u00a0<\/p><p>You cannot untangle years of poor bookkeeping in the weeks leading up to a business sale. Preparing for a tax-efficient exit requires your balance sheet to be accurate, up-to-date, and audit-ready at all times.\u00a0<\/p><p>As a business grows, founders should consider not only payroll and compliance obligations but also the potential tax implications of future business sales. Read more in our\u00a0<a href=\"https:\/\/befreeltd.com\/au\/resources\/blogs\/federal-budget-tax-reforms-investors-must-act\/\">Federal Budget Tax Reforms: what investors must act<\/a>\u00a0on blog.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-294b95b elementor-widget elementor-widget-heading\" data-id=\"294b95b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Secure Your Exit with Professional Accounting Support\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1c298b0 elementor-widget elementor-widget-text-editor\" data-id=\"1c298b0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Protecting the value of your business sale requires consistent, strict financial management long before you decide to sell. Partnering with an outside\u00a0<a href=\"https:\/\/befreeltd.com\/au\/services\/accounting-outsourcing\/\">accounting outsourcing company<\/a>\u00a0keeps business owners financially strong. An outside team handles daily bookkeeping, asset depreciation schedules, and entity reconciliations required to track thresholds like the $6 million asset limit. This real-time visibility enables you and your advising accountants to implement structural tax strategies early.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-606b9f0 elementor-widget elementor-widget-heading\" data-id=\"606b9f0\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Build Your Commercial Exit Strategy on Accurate Data\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-3970e64 elementor-widget elementor-widget-text-editor\" data-id=\"3970e64\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>At Befree, we have trained, dedicated accounting professionals who handle complex ledger work to Australian standards. Whether you are an advising practice needing robust data to formulate tax advice or a business owner preparing for a future exit, our outsourced teams deliver the precise financial clarity required. Contact our Australian team on 1300 873 733 to discuss how we can secure your back-office operations.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-a9fb274 e-flex e-con-boxed e-con e-parent\" data-id=\"a9fb274\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-dab65aa elementor-widget elementor-widget-heading\" data-id=\"dab65aa\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">FAQs \n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-de6d5ab elementor-widget elementor-widget-n-accordion\" data-id=\"de6d5ab\" data-element_type=\"widget\" data-e-type=\"widget\" data-settings=\"{&quot;n_accordion_animation_duration&quot;:{&quot;unit&quot;:&quot;ms&quot;,&quot;size&quot;:300,&quot;sizes&quot;:[]},&quot;default_state&quot;:&quot;expanded&quot;,&quot;max_items_expended&quot;:&quot;one&quot;}\" data-widget_type=\"nested-accordion.default\">\n\t\t\t\t\t\t\t<div class=\"e-n-accordion\" aria-label=\"Accordion. Open links with Enter or Space, close with Escape, and navigate with Arrow Keys\">\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-2330\" class=\"e-n-accordion-item\" open>\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"1\" tabindex=\"0\" aria-expanded=\"true\" aria-controls=\"e-n-accordion-item-2330\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> If I operate through a family trust, can the trust access the Small Business CGT Concessions? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-2330\" class=\"elementor-element elementor-element-ea20f6a e-con-full e-flex e-con e-child\" data-id=\"ea20f6a\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-e469b3b elementor-widget elementor-widget-text-editor\" data-id=\"e469b3b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>No trust can qualify for the concessions unless it meets the basic eligibility criteria ($2 million turnover test or $6 million maximum net asset value test). However, distributing the tax-free capital gain from the trust to the individual beneficiaries requires strict adherence to ATO rules, particularly the \u2018significant individual\u2019 test, which determines who owns a 20% or greater stake in the trust distributions.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-2331\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"2\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-2331\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> What are the CGT rules on earn-out arrangements? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-2331\" class=\"elementor-element elementor-element-a02feb7 e-con-full e-flex e-con e-child\" data-id=\"a02feb7\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-9d167bb elementor-widget elementor-widget-text-editor\" data-id=\"9d167bb\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>In cases where a business is sold with a \u2018look-through earn-out right\u2019 (where part of the sale price is contingent on future business performance), the first sale causes a CGT event. But the future earn-out payments are not taxed upfront. Rather, the adjusted capital proceeds are applied to the future payments you receive instead of the original capital proceeds. Now you recalculate CGT liability for the year you sold the business and amend your tax return accordingly.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-2332\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"3\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-2332\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> Is selling shares in my company a sale of an active asset? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-2332\" class=\"elementor-element elementor-element-c9db8f0 e-con-full e-flex e-con e-child\" data-id=\"c9db8f0\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-c48d606 elementor-widget elementor-widget-text-editor\" data-id=\"c48d606\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Shares in a company or units in a trust can qualify as active assets, but only if they pass the &#8220;80% test.&#8221; This means that the total market value of the active assets held inside the company must be 80% or more of the total market value of all the company&#8217;s assets. If the company holds too much passive cash or non-business real estate, the shares will fail the test.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-2333\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"4\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-2333\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> What records does the ATO expect me to keep for CGT purposes? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-2333\" class=\"elementor-element elementor-element-7946ebf e-con-full e-flex e-con e-child\" data-id=\"7946ebf\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-860e250 elementor-widget elementor-widget-text-editor\" data-id=\"860e250\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>The ATO requires you to keep records of every transaction, event, or circumstance that may be relevant to working out whether you have made a capital gain or loss. This includes contracts of purchase and sale, receipts for improvements made to the asset, records of legal or stamp duty fees, and valuations. These must be kept for at least five years after the relevant CGT event has occurred.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t\t<details id=\"e-n-accordion-item-2334\" class=\"e-n-accordion-item\" >\n\t\t\t\t<summary class=\"e-n-accordion-item-title\" data-accordion-index=\"5\" tabindex=\"-1\" aria-expanded=\"false\" aria-controls=\"e-n-accordion-item-2334\" >\n\t\t\t\t\t<span class='e-n-accordion-item-title-header'><h3 class=\"e-n-accordion-item-title-text\"> How do the impending 2027 changes to the general CGT discount impact business sales? <\/h3><\/span>\n\t\t\t\t\t\t\t<span class='e-n-accordion-item-title-icon'>\n\t\t\t<span class='e-opened' ><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-up\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M240.971 130.524l194.343 194.343c9.373 9.373 9.373 24.569 0 33.941l-22.667 22.667c-9.357 9.357-24.522 9.375-33.901.04L224 227.495 69.255 381.516c-9.379 9.335-24.544 9.317-33.901-.04l-22.667-22.667c-9.373-9.373-9.373-24.569 0-33.941L207.03 130.525c9.372-9.373 24.568-9.373 33.941-.001z\"><\/path><\/svg><\/span>\n\t\t\t<span class='e-closed'><svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fas-chevron-down\" viewBox=\"0 0 448 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M207.029 381.476L12.686 187.132c-9.373-9.373-9.373-24.569 0-33.941l22.667-22.667c9.357-9.357 24.522-9.375 33.901-.04L224 284.505l154.745-154.021c9.379-9.335 24.544-9.317 33.901.04l22.667 22.667c9.373 9.373 9.373 24.569 0 33.941L240.971 381.476c-9.373 9.372-24.569 9.372-33.942 0z\"><\/path><\/svg><\/span>\n\t\t<\/span>\n\n\t\t\t\t\t\t<\/summary>\n\t\t\t\t<div role=\"region\" aria-labelledby=\"e-n-accordion-item-2334\" class=\"elementor-element elementor-element-175f915 e-con-full e-flex e-con e-child\" data-id=\"175f915\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t<div class=\"elementor-element elementor-element-4044913 elementor-widget elementor-widget-text-editor\" data-id=\"4044913\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t\t\t\t\t\t<p>Currently, an individual selling a business asset held for over 12 months can apply the general 50% CGT discount before applying the Small Business Concessions. From 1 July 2027, this general 50% discount is being replaced by cost base indexation. While the specific Small Business Concessions are retained, the way your initial capital gain is calculated will change fundamentally, making early exit planning essential before the new financial year takes effect.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/details>\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<script type=\"application\/ld+json\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"If I operate through a family trust, can the trust access the Small Business CGT Concessions?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"No trust can qualify for the concessions unless it meets the basic eligibility criteria ($2 million turnover test or $6 million maximum net asset value test). However, distributing the tax-free capital gain from the trust to the individual beneficiaries requires strict adherence to ATO rules, particularly the \\u2018significant individual\\u2019 test, which determines who owns a 20% or greater stake in the trust distributions.\"}},{\"@type\":\"Question\",\"name\":\"What are the CGT rules on earn-out arrangements?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"In cases where a business is sold with a \\u2018look-through earn-out right\\u2019 (where part of the sale price is contingent on future business performance), the first sale causes a CGT event. But the future earn-out payments are not taxed upfront. Rather, the adjusted capital proceeds are applied to the future payments you receive instead of the original capital proceeds. Now you recalculate CGT liability for the year you sold the business and amend your tax return accordingly.\"}},{\"@type\":\"Question\",\"name\":\"Is selling shares in my company a sale of an active asset?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Shares in a company or units in a trust can qualify as active assets, but only if they pass the &#8220;80% test.&#8221; This means that the total market value of the active assets held inside the company must be 80% or more of the total market value of all the company&#8217;s assets. If the company holds too much passive cash or non-business real estate, the shares will fail the test.\"}},{\"@type\":\"Question\",\"name\":\"What records does the ATO expect me to keep for CGT purposes?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"The ATO requires you to keep records of every transaction, event, or circumstance that may be relevant to working out whether you have made a capital gain or loss. This includes contracts of purchase and sale, receipts for improvements made to the asset, records of legal or stamp duty fees, and valuations. These must be kept for at least five years after the relevant CGT event has occurred.\"}},{\"@type\":\"Question\",\"name\":\"How do the impending 2027 changes to the general CGT discount impact business sales?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Currently, an individual selling a business asset held for over 12 months can apply the general 50% CGT discount before applying the Small Business Concessions. From 1 July 2027, this general 50% discount is being replaced by cost base indexation. While the specific Small Business Concessions are retained, the way your initial capital gain is calculated will change fundamentally, making early exit planning essential before the new financial year takes effect.\"}}]}<\/script>\n\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>When you finally sell your business, dispose of a commercial property or exit a partnership, the Australian Taxation Office (ATO) will want a share of the profit. This is the Capital Gains Tax or CGT. For the 2026\/2027 financial year, CGT planning requires close attention. The Federal Government is introducing legislation effective from 1 July [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":17909,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-17893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.9 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Capital Gains Tax Australia: Guide for Business Owners<\/title>\n<meta name=\"description\" content=\"Learn how Capital Gains Tax works in Australia, explore small business CGT concessions, eligibility rules, and ways to reduce tax when selling a business.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" 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Australia: Guide for Business Owners","isPartOf":{"@id":"https:\/\/befreeltd.com\/au\/#website"},"primaryImageOfPage":{"@id":"https:\/\/befreeltd.com\/au\/resources\/blogs\/capital-gains-tax-australia-guide\/#primaryimage"},"image":{"@id":"https:\/\/befreeltd.com\/au\/resources\/blogs\/capital-gains-tax-australia-guide\/#primaryimage"},"thumbnailUrl":"https:\/\/befreeltd.com\/au\/wp-content\/uploads\/Capital-Gains-Tax-in-Australia.png","datePublished":"2026-06-11T10:03:23+00:00","dateModified":"2026-07-08T10:11:17+00:00","description":"Learn how Capital Gains Tax works in Australia, explore small business CGT concessions, eligibility rules, and ways to reduce tax when selling a 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