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Significant Individuals and CGT Concession Stakeholders

This article explains the terms significant individual and CGT concession stakeholder.

Particularly, the relevance of the terms and what they are, as well as the significant individual test.

Relevance

The term significant individual is relevant to:

  1. The small business 15-year exemption for individuals where the CGT asset is a share in a company or a unit in a unit trust;

  2. The small business 15-year exemption for companies and trusts; and

  3. The small business retirement exemption for companies and trusts.

The term CGT concession stakeholder is relevant to:

  1. The Active Asset Test where the CGT asset is a share in a widely held company or a unit in a widely held unit trust;

  2. Two of the four additional tests for shares in a company or units in a unit trust;

  3. The small business 15-year exemption for companies and trusts;

  4. CGT events J5 and J2 where the small business roll-over has been chosen and the replacement asset is a share in a company or a unit in a unit trust; and

  5. The small business retirement exemption for companies and trusts.

Significant individual and the significant individual test

A significant individual is an individual that has a small business participation percentage in a company or trust of at least 20%.

As for the significant individual test, the test is applied to an entity.  An entity satisfies the significant individual test if the entity had at least one significant individual just before the relevant CGT event.

CGT concession stakeholder

A CGT concession stakeholder is:

  1. an individual that has a small business participation percentage in a company or trust of at least 20%; or

  2. the spouse of such an individual where the spouse has a small business participation percentage of greater than zero.

Disclaimer – The above is intended as commentary and general information only.  It should not be relied upon as taxation advice.  Formal taxation advice should be sought for particular transactions or on matters of interest arising from the above.

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NEWS ARTICLES IN RELATION TO THE TERMS SIGNIFICANT INDIVIDUALS & CGT CONCESSION STAKEHOLDERS