Q&A on the small business concessions and super’s non-concessional contribution cap

 

Q: I am close to reaching my total super balance, however I have assets in my business that I want to contribute to my superannuation. Can I do so without breaching the NCCC?

A: If those assets meet either or both of the small business exemptions rules, then (subject to the caps in relation to those concessions not being breached) you can under S292-90(2)(c)(iii) ITAA97 apply the proceeds of selling those assets without breaching your NCCC.

Q: I have held business assets for more than 15 years, however for the first five years the assets were not used in the business. Would I still be able to use the 15-year small business asset concession?

A: As long as you otherwise meet the basic conditions of the 15-year active asset CGT exemption, then you will still be able to use the concession. However if the assets were not assets of your small business for more than half the time you owned them or you held them as business assets for less than seven-and-a-half years after holding the asset for 15 years or more, then you would not meet the requirements.

Q: I am not in business myself but I own assets used by a small business run by my partner. Can I use the small business exemptions?

A: As long as the assets and the small business otherwise meet the “basic conditions”, yes you can. However, you will need to document your ownership of the assets and how they are used by the business.

Q: I sold some small business assets a month ago and contributed the proceeds to my superannuation fund at the time. I was not aware at the time of the concessions and now want to retrospectively apply the concessions. Can I do this?

A: No. The law is very clear that the election in the appropriate form must be prior to or at the same time as making the contribution to your superannuation. The election will be invalid if made after the time of contribution. These contributions will still be part of your NCCC. However, if you make subsequent small business exemptions contributions, make sure to make the election prior to or at the time of making those contributions.

Q: I sold some business assets that otherwise met the small business retirement exemption (SBRE) requirements three months ago. I have not yet contributed those amounts to my super, they are just sitting in an account. Can I now make the contributions such that they don’t count towards my NCCC?

A: Yes you can. You must make the election to use the concession prior to or at the same time as making the contribution, however, it does not need to be made at the time of selling the asset.

Q: I am 65 and I have some small business assets that meet the requirements for the small business retirement exemption. I want to sell some of those assets under the retirement exemption, however I want to use that money to get rid of some debt rather than contribute it to superannuation. Can I do this?

A: As long as you are over 55 and meet the requirements then you are not required to put the amount into a superannuation account.