Introduction
Minimising capital gains tax is a structuring exercise, not a loophole. It comes down to who owns an asset, how that ownership is set up, and when a sale is triggered — all decisions that are entirely legal to plan for in advance. For most business owners, the moment this actually matters is at exit — selling a business, an investment, or a set of business assets. What the entity looks like on paper at that point can be worth hundreds of thousands of dollars either way.
This guide walks through where the capital gains tax discount applies, why company ownership can shut it out entirely, and how sale structure and timing change the outcome for Australian business owners.
Interactive Tool: See If You Qualify for Capital Gains Tax Discounts & Concessions
Capital Gains Tax Structuring Checker
Find out if your business sale or asset exit is structured to legally minimise capital gains tax and access available discounts.
What type of entity currently owns the asset or business you plan to sell?
Is the asset being sold an ‘active asset’ used in running a business (e.g. goodwill, client list, business IP)?
Do you (or your group) meet either of these thresholds: under $6 million net assets OR under $2 million aggregated turnover?
Are you considering a rollover or retirement exemption to defer or reduce your CGT liability?
✅ General Discount Likely Available
Because you own the asset as an individual, you may be eligible for the 50% capital gains tax general discount under Section 115-100 of the Income Tax Assessment Act 1997 (Cth). If the asset is also an active business asset and you meet the small business thresholds, you may qualify for a further 50% active asset reduction.
Tip: Proper structuring and timing are critical to access both discounts.
❌ No General Discount for Companies
Assets owned by a company are not eligible for the 50% general discount under Section 115-100 of the Income Tax Assessment Act 1997 (Cth). The full capital gain is assessable at the company tax rate.
Strategy: Consider whether a restructure (such as a unit trust) is possible before sale to enable access to discounts for individual unitholders.
⚖️ Unit Trust Structure: Discount May Be Available
If your unit trust is correctly structured and the trust deed allows capital gains streaming, individual unitholders may access the 50% general discount and potentially the active asset reduction.
Warning: The trustee must make a valid resolution before year-end, and eligibility depends on the trust deed and compliance with Section 115-222 of the Income Tax Assessment Act 1997 (Cth).
✅ Active Asset: Additional 50% Reduction Possible
If your asset is an active asset, and you meet the small business net asset or turnover thresholds, you may qualify for an additional 50% reduction under Section 152-205 of the Income Tax Assessment Act 1997 (Cth). This can reduce your taxable gain to just 25% of the original amount.
Note: Eligibility is strict and requires careful documentation.
⚖️ Rollover or Retirement Exemption: Timing Matters
You may be able to defer or reduce your CGT by using the small business rollover or retirement exemption under Section 152-305 of the Income Tax Assessment Act 1997 (Cth).
Important: These mechanisms do not eliminate the tax, only defer or reduce it. Sequencing and compliance are critical.
❌ Not Eligible for CGT Discounts or Concessions
Based on your answers, you may not be eligible for the main capital gains tax discounts or small business concessions.
Next Step: A tailored review may identify alternative strategies or highlight compliance risks.
The Capital Gains Tax General Discount
For a business owner selling a company, an investment, or a set of business assets, the structure used to hold that asset matters as much as the asset itself. This is because access to the capital gains tax general discount depends entirely on who — or what — owns the asset at the point of sale.
Individuals and trusts can generally access this discount. In practice, that means a $1 million capital gain can be reduced to $500,000 of assessable income, depending on how the asset is held and the circumstances of the sale.
Companies do not have the same access. If a company owns the asset being sold, the full gain is assessable — there is no equivalent 50% reduction available at the company level.
This is where ownership structure becomes a cost issue rather than a compliance formality — and why it is worth getting tax minimisation advice on ownership structuring well before a sale is planned. A business owner who sells $5 million in assets through a company reports the full $5 million, while the same sale made as an individual could see only $2.5 million reported — a difference that exists purely because of how the entity was set up, not because of anything about the sale itself.
Selling shares rather than assets introduces a separate structural risk. Where a business owner sells shares in the company rather than the underlying assets, any undisclosed liabilities or pending legal claims attached to that company can transfer to the buyer along with the shares.
For a business owner structuring an eventual exit, that risk means the way a sale is structured now can determine both the tax outcome and the legal exposure passed on later.
How to Minimise Capital Gains Taxes as a Company
Individual ownership isn't available to every business. Where there are multiple partners or shared ownership is unavoidable, the discount doesn't disappear — it just requires a different structure to reach it.
A unit trust is one option, and it works differently to a standard company for tax purposes. Instead of shareholders, a unit trust has unitholders with a fixed entitlement to trust assets and profits.
Where a company acts as trustee and the individuals involved hold units in the trust, proceeds from a sale are distributed to those unitholders directly. Because the unitholders are individuals, they can access the same general discount that a sole owner selling personally would receive.
That outcome isn't automatic, either. It depends on the trust deed actually permitting capital gains to be streamed to specific unitholders, and on the trustee making a valid resolution to that effect; typically before the end of the financial year.
This is where the structure, and how carefully it's documented each year, determines whether multiple business partners can each access the discount or end up taxed at the full company rate.
A further reduction can sit on top of the general discount, depending on the nature of the asset being sold. Active assets; those genuinely used in running the business, such as goodwill, a client list, or business intellectual property; may qualify for an additional 50% active asset reduction.
Applied together, the two discounts compound. A $1 million active asset sale that would otherwise report $500,000 under the general discount could report as little as $250,000, depending on how the asset qualifies and how the sale is structured.
Access to this second discount isn't automatic. It requires meeting the active asset test itself, plus either a $6 million net asset value threshold or a $2 million aggregated turnover threshold — a narrower turnover test than the $10 million threshold used for most other small business tax concessions, which is where businesses often assume they qualify when they don't.
Rollover Options: Deferring Rather Than Avoiding
Even after both discounts apply, a business owner isn't necessarily locked into declaring the remaining gain in the year of sale. Two rollover mechanisms exist that can shift when that gain is reported — though neither removes the tax liability, only its timing.
The first path is the small business retirement exemption, which lets an eligible individual exclude a capital gain from tax up to a $500,000 lifetime limit. Where the individual is under 55, that exempted amount generally has to go into a complying superannuation fund; over 55, no contribution is required.
There's also a separate lifetime CGT cap — $1,865,000 for the 2025–26 year — that lets an eligible super contribution made this way sit outside the normal contribution caps, rather than breaching them.
WealthSafe is not a licensed superannuation adviser and cannot provide specific advice on whether a retirement exemption or SMSF contribution strategy suits an individual's circumstances.
The second path is a small business rollover, where proceeds are redirected into a replacement business asset acquired within one year before to two years after the original sale. This defers the gain rather than triggering tax immediately, though it isn't a permanent deferral — the gain can still crystallise later if the replacement conditions aren't met within that window.
For a business owner selling and reinvesting more than once, the difference between reporting a gain twice and reporting it once ; at the point of the final sale — comes down entirely to how the rollover is sequenced and structured.
None of these mechanisms remove the underlying tax liability. What they change is when it falls due, and getting that sequencing wrong is what turns a deferred tax bill into gains reported earlier, and taxed sooner, than necessary.
Conclusion
Capital gains tax minimisation touches ownership structure, sale mechanics, and timing — and the right combination depends on how a specific business, and its planned exit, is actually structured, so it is worth speaking with our specialists at WealthSafe about a tailored tax minimisation strategy.
WealthSafe's approach to this has always been the same: structure ownership correctly, understand where the discounts genuinely apply, and time transactions with the rules in mind — not around them. Getting this sequencing right is what separates a defensible tax outcome from one that invites a closer look.
WealthSafe also advises more broadly on trusts, company structures, and residency planning, including strategic advice on moving offshore from Australia, all of which interact with how a capital gain is ultimately taxed.
