Detailed Answer

    Subdivision 152-A sets the basic conditions: CGT event happens, gain would be assessable, asset satisfies the active asset test, and the taxpayer satisfies either the $6m maximum net asset value test or the $2m small business entity turnover test.

    Once basic conditions are met, taxpayers can apply one or more of the four concessions — stacked in the prescribed order to maximise relief.

    Application requires careful structuring. Common issues include the active asset test for shares (Subdivision 152-D), the significant individual and CGT concession stakeholder rules, and the interaction with Division 115 (50% general discount).

    The Problems Professionals Face

    Step 1

    Where to start

    → Confirm the CGT event triggers an assessable gain

    Step 2

    What comes after step 1

    → Apply the maximum net asset value test ($6m) or SBE turnover test ($2m)

    Step 3

    What comes after step 2

    → Apply the active asset test (asset used in business for at least half the ownership period)

    Step 4

    What comes after step 3

    → Apply the 15-year exemption first if eligible (owned 15+ years, retirement, age 55+)

    Step 5

    What comes after step 4

    → Apply the 50% active asset reduction if 15-year exemption not available

    Step 6

    What comes after step 5

    → Apply the retirement exemption ($500k lifetime cap)

    Step 7

    What comes after step 6

    → Apply the small business rollover for remaining gain

    Key Capabilities

    Primary Sources

    ITAA 1997/1936, GST Act 1999, ATO rulings, Federal Court decisions

    Citation-Aware

    Use source references to check the draft against the applicable authority

    Professional Review

    Outputs require independent review by an appropriately qualified practitioner

    Why generic AI is risky for 'CGT small business concessions'

    • Generic AI tools hallucinate Australian legislative section numbers and ATO ruling identifiers
    • AI can misidentify the applicable version of a provision
    • Check the status and binding effect of any ATO guidance cited
    • Using unverifiable AI in professional tax work risks the TPB Code of Professional Conduct

    How Cassandra handles this

    • Australian tax and legal research workflows
    • Check any cited ITAA section, ATO ruling or case against the official text
    • Independent professional review is required before relying on an output
    • Check the relevant income year, amendments and status directly with the issuing authority

    Editorial Standards

    ABN 70 659 258 367
    Australian-registered company
    Publisher
    Cassandra Research — see /about
    Review Required
    An appropriately qualified practitioner must verify the facts, sources and conclusions
    Primary Sources
    ITAA 1997/1936, GST Act 1999, FBTAA, Corporations Act 2001
    Last Updated
    2026-06-01
    Corrections Policy
    See /corrections

    Frequently Asked Questions

    The CGT small business concessions in Division 152 of the ITAA 1997 provide four concessions — 15-year exemption, 50% active asset reduction, retirement exemption, and rollover — that can reduce or eliminate capital gains for eligible small businesses.

    Cassandra Research publishes this general overview. This page does not certify individual authorship or a registered practitioner's review; independently check the sources and consult a qualified practitioner before relying on it.

    Check the applicable income year, legislation, ruling status and subsequent decisions directly with the relevant authority. A page date does not establish that the legal position is current. See /corrections to report an issue.

    This page is general information, not personal tax advice. Always confirm with a TPB-registered tax agent or admitted lawyer before relying on it for client work.

    Every primary source referenced — ITAA sections, ATO ruling numbers, and case names — can be verified on the ATO Legal Database, Federal Register of Legislation, or AustLII.

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    Author: Imran Hussain
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