ARTICLE · 27 JULY 2015

Three tips for trusts and Small Business CGT Concessions (SBCGTC)

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The article identifies three important SBCGTC considerations that advisers should be aware of, when dealing with trusts.

AustraliaTax

Small Business CGT Concessions

The ATO touts that 75% of Small Business CGT Concession ("SBCGTC") claims contain errors – a disturbingly high statistic. This statistic not only emphasises the need for advisers to take particular care when working through the provisions, but also forces us to question where the risks lie.

Some of the more complex mechanics of the SBCGTC can be found when working with discretionary trust taxpayers. In light of this, we have identified three important considerations that should be front of mind when dealing with trusts.

1. Verify the trust is "connected with" a small business entity

Consider the following structure:

three tips for trusts structure 1

If the land held in the trust is sold, you must focus on the trust as the relevant taxpayer for the purposes of the SBCGTC.

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