Selling your business is a CGT event — but Australia has some of the most generous small business tax concessions in the world. Used correctly, they can reduce or eliminate the tax on your life’s work. Importantly, these concessions are not part of the proposed 2026 changes.
The headline: the small business CGT concessions (Division 152)
When an eligible owner sells an active asset (the business, its goodwill, or shares/units in it), four concessions can apply — and they can be combined:
1. The 15-year exemption
If you’ve continuously owned the active asset for 15+ years, are 55 or older and selling in connection with retirement (or are permanently incapacitated), the entire capital gain is disregarded — no CGT at all. The exempt amount can also be contributed to super under the CGT cap.
2. The 50% active asset reduction
Reduces the taxable capital gain by a further 50% — on top of the general 50% CGT discount for assets held more than 12 months. Together those can cut the gain by 75% before the other concessions even apply.
3. The retirement exemption
Disregard up to $500,000 of capital gain over your lifetime. If you’re under 55, the exempt amount must be paid into a complying super fund.
4. The small business rollover
Defer the gain by acquiring a replacement active asset (or improving an existing one) within the replacement period. Useful if you’re selling one business to buy or build another.
Who qualifies?
The concessions are detailed, but the gateway is broadly:
- You’re a small business entity with aggregated turnover under $2 million, or you satisfy the $6 million maximum net asset value test; and
- the asset sold is an active asset (used in carrying on the business).
Selling shares or trust units adds further conditions — broadly, you need to be a significant individual / CGT concession stakeholder and the entity must pass an active-asset test. Because the eligibility and ordering rules are intricate, this is an area where good advice pays for itself many times over.
The Government announced that, from 1 July 2027, the general 50% CGT discount would be replaced by cost-base indexation (so only above-inflation gains are taxed) plus a 30% minimum tax on real gains. Assets held across that date would have their gain split into a pre- and post-1 July 2027 portion.
Crucially for business sellers: the four small business CGT concessions above, and the main-residence exemption, are proposed to be unchanged.
These are proposals only. The ATO states on its own guidance that the measure “is not yet law”; no draft legislation has been released, several details are still under consultation, and the measures may be amended or dropped. Treat any planning around them as provisional and confirm the current position with the ATO and your adviser.
Asset sale vs share sale
How you structure the deal changes the tax. A share sale is often simpler for the seller and can access the concessions on the shares; an asset sale (selling the business and its assets) has different CGT, GST and stamp-duty consequences and is frequently preferred by buyers for liability reasons. The right answer depends on both sides — model both before you negotiate.
Model your sale before you sit down with advisers
BuyBuildSell’s deal room compares asset vs share sale, models vendor finance and earn-outs, and shows the tax implications region-by-region — so you walk into adviser meetings already knowing the shape of the deal.
Start a confidential enquiry →Frequently asked questions
Do I pay CGT when I sell my business in Australia?
Usually yes — it’s a CGT event — but the four small business CGT concessions (Div 152) can reduce or eliminate the gain for eligible owners, on top of the general 50% discount for assets held 12+ months.
What are the small business CGT concessions?
The 15-year exemption, the 50% active asset reduction, the retirement exemption (up to $500,000 lifetime), and the small business rollover. They can be combined.
Who qualifies?
Broadly, a small business entity with aggregated turnover under $2m (or passing the $6m net asset value test) selling an active asset. Shares/units have extra conditions. Get advice.
Are the concessions changing in 2026?
The four small business CGT concessions are proposed to be unchanged. The 2026 measures (replacing the general 50% discount from 1 July 2027) are proposals only — the ATO says they are not yet law. Confirm the current position with the ATO.
Asset sale or share sale — which is better?
It depends on both parties and the tax/GST/duty profile. Share sales are often simpler for sellers; asset sales are often preferred by buyers. Model both with your adviser.
Related: Vendor finance & earn-outs · UK CGT & BADR · What’s your business worth? · How to sell without a broker.