Running a small business is challenging enough without navigating complex tax rules. Fortunately, Australian small businesses have access to a range of powerful Small Business Concessions designed to reduce tax pressure, support investment, and encourage long-term growth.
Below is a clear breakdown of three major areas where business owners can save:
Capital Gains Tax (CGT) relief, asset write-offs, and business structure optimisation.
1. Capital Gains Tax (CGT) Relief – Reduce or Eliminate Tax on Business Sales
If you’re selling a business, shares, or active assets, the Small Business CGT Concessions can significantly reduce and sometimes eliminate payable tax.
Key CGT Concessions
- 15-year exemption
- If you’ve owned the business for 15+ years and meet the age or retirement criteria, you may pay zero CGT.
- 50% Active Asset Reduction
- Reduce the capital gain on business assets by 50%.
- Retirement exemption (up to $500,000)
- Redirect up to $500k into retirement — tax-free.
- CGT Rollover
- Defer CGT when replacing assets within a time frame.
Why it matters:
For business owners planning succession, restructuring, or future retirement, these concessions can save tens of thousands, sometimes millions.
2. Asset Write-Offs — Boost Cash Flow Immediately
Investing in tools, vehicles, machinery, or technology?
Small Business Concessions allow you to accelerate deductions and improve cash flow.
Benefits Include:
- Instant asset write-off (subject to thresholds)
- Deduct eligible assets in the year of purchase, reducing taxable income.
- Simplified depreciation rules
- Easier bookkeeping + faster tax benefits.
- Pooling assets
- Claim depreciation on groups of assets at simplified rates.
Why it matters:
Immediate deductions help businesses reinvest sooner, manage cash effectively, and upgrade essential equipment without the stress.
3. Structure Optimisation — Set Up for Growth and Asset Protection
Choosing the right business structure can influence your tax outcomes, asset safety, and future scalability.
Common structure options:
- Sole Trader — simple, low cost, but limited asset protection
- Partnership — shared control, but shared liability
- Company — tax-effective, offers asset protection
- Trusts (Discretionary / Unit) — flexible profit distribution, strong protection
- Combination structures — companies + trusts for optimal benefits
Key Tax Benefits
- Lower tax rates via a company
- Strategic profit distribution through trusts
- Ability to access additional small business concessions
- Improved eligibility for CGT concessions during business sales
Why it matters:
The right structure minimises risk, maximises tax efficiency, and future-proofs your business for growth, sale, or succession.
Final Takeaway
Small Business Concessions are some of the most valuable benefits available to Australian business owners, but they’re often misunderstood or underutilised.
When applied correctly, they can help you:
- Reduce tax during major transactions
- Unlock immediate deductions
- Protect your business and personal assets
- Increase long-term financial stability
If you’re unsure whether your business qualifies or want to optimise your tax strategy, speak with a specialist who understands small business taxation and structure planning.
