The extension of the capital gains tax small business concessions can now be enjoyed by a larger number of small businesses according to Deloitte Growth Solutions partner Spyros Kotsopoulos.

“Under current law, taxpayers relying on the $2 million turnover test could not access the small business CGT concessions where the relevant asset was owned by one entity but used by a related entity which carried on business,” said Mr Kotsopoulos.

“The Government has extended the concession to small business entities where a taxpayer owns an asset used by a related entity carrying on a business as well as partners owning a CGT asset used in the partnership business.

“For partnerships, the small business entity test requires the taxpayer making the capital gain to be a partner of the partnership and for the asset to be an asset of the partnership.

“From a previous policy perspective it was difficult to reconcile why the rules applied differently depending on whether a taxpayer qualified for the $2 million turnover test or the concessions under the $6 million net asset value test.

“This is a welcome change that has effect from the 2007-8 income year."

“Interestingly this proposal had been foreshadowed by the Assistant

Treasurer of the previous Government but with the change of Government there was uncertainty as to whether it would see the light of day."

“Business will be pleased to see this come through in this Budget to give taxpayers certainty,” added Mr Kotsopoulos.