Step 3 in maximising your superannuation benefits is utilising two of the four small business capital gains tax concessions being the Retirement Exemption and the 15 Year Exemption.

You need to meet the basic conditions to be eligible to use these concessions which generally include running a business with a turnover of less than $2 million, you sell an active asset that is your business or is used in your business, you have no more than $6 million of net assets and if you are a company or a trust you need to have a significant individual. If you meet these conditions, then you may be able to choose to apply the Retirement Exemption and disregard Capital Gains of up to $500,000.

If you are under 55, then you will need to roll this amount into your super fund. This $500,000 is a lifetime cap per individual.

You also have the choice of using the Very Important 15 Year Exemption where if your business has continuously owned an active asset for 15 years or more and are over 55 years of age and retiring or permanently incapacitated then you can disregard the Capital Gain.

This is a VERY IMPORTANT Exemption as you have the choice to roll an amount up to the amount of the sale proceeds NOT just the capital gain amount into your super fund up to your Lifetime CGT Cap of $1,445,000 (2018).

Both of these CGT Concessions if contributed to super do not apply to you non-concessional cap and do not affect the amount of non-concessional contributions you can make in a financial year.

The 15 Year Exemption can be very hard to quality for but if you can qualify for it, it can really benefit your superannuation.

Please note that this is general factual information and we are not responsible for any outcomes of you making decisions on this information. Please obtain specific advice in relation to your circumstances.

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