For taxpayers wishing to access the small business capital gains tax (CGT) concessions for shares in a company or interests in a trust, they must first meet the standard requirements as well as further conditions in place for such entities.

A taxpayer can apply for small business CGT concessions to lower or dismiss their capital gain from the disposal of CGT assets. If the CGT asset is a share in a company or interest in a trust, further conditions that will need to be met are:

• The taxpayer must have carried on a business just before the CGT event or meet the maximum net asset value test.
• Meet the 90% test, satisfied when the CGT concession stakeholders in the company or trust where the shares or interest are held have a total small business percentage in the entity of at least 90%. The percentage can be held directly or indirectly through multiple included entities.
• The company or trust in which the shares or interests are held must either be a CGT small business entity for the income year or meet the maximum net asset value test. The rules for determining whether an entity is connected with the company or trust for this purpose are modified. Under the modified connected entity rule, the company or trust controls another entity if it has a control percentage of at least 20% or more, in that other entity.

The share or interest must satisfy the modified active asset test which looks through to the activities and assets of the underlying entities. The asset of an underlying entity will only be an active asset if the previous conditions have been met

These requirements apply to CGT events after 8 February 2018. If you made a capital gain relating to shares in a company or an interest in a trust before then, you must meet the basic conditions and just before the CGT event you must either be a CGT concession stakeholder in the company or trust or meet the 90% test.