Private ruling: 15-year small business exemption
Date of advice: 27 May 2026
Published: 10 August 2026
Ruling period: Year ending 30 June 20YY
Date scheme commenced: 1 July 20YY

Ruling: Q1: Will a superannuation contribution that was made on to your superannuation fund, qualify as a capital gains tax (CGT) small business 15-year exemption contribution under subsection 292-100(2) of the Income Tax Assessment Act 1997 (ITAA 1997)? | A1: No.

Relevant facts and circumstances: The Taxpayer held a 50% share in a commercial property (the Property). The Taxpayer and their spouse built a premises designed in accordance with their business plan. The contract of sale for the Property was established with a date of Date A. Full capital proceeds from the sale were received to by the Taxpayer on the consequent Settlement Date of Date B, which resulted in a net capital gain, with the Taxpayers gain being 50% of the gain. The payment of proceeds was made to the Taxpayer's personal bank account on Date B and recorded in their individual tax return as a net capital loss, which was lodged on Date C. The Taxpayer, then lodged an objection to a notice of assessment, advising that the amount should be recorded as nil, as they were entitled to the 15-year small business exemption. The outcome of that objection was favourable and sale of the asset was considered a small business sale for CGT purposes. The Taxpayer lodged a Capital gains tax cap election form with their fund, to treat a contribution of $XXX,XXX as a 'Small business 15-year exemption amount'.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 152-110 | Income Tax Assessment Act 1997 section 152-125 | Income Tax Assessment Act 1997 section 292-90 | Income Tax Assessment Act 1997 section 292-100 | Income Tax Assessment Act 1997 section 292-105

Reasons for decision: Detailed Reasoning - 15-year exemption: If you qualify for the 15-year CGT exemption the entire capital gain you have made on your business over the years is disregarded. Further, you don't have to apply capital losses against your capital gain. To satisfy the 15-year exemption and disregard any capital gain arising from a CGT event if all of the following conditions are satisfied [1] : (a) the basic conditions are satisfied for the gain [2] ; (b) you continuously owned the CGT asset for the 15-year period ending just before the CGT event; (c) if the CGT asset is a share in a company or an interest in a trust the company or trust had a significant individual for a total of at least 15 years during which you owned the CGT asset: (d) either: • at least 55 years old and the CGT event happened in connection with your retirement, or • permanently incapacitated at the time of the CGT event. An objection lodged with ATO (reference:1052446505239) has stated that the criteria for the 15-year exemption has been met. | Detailed Reasoning - CGT lifetime cap: If an individual makes a contribution to their superannuation fund with the intent of disregarding all or part of the capital gain under the CGT small business concessions, they may also be eligible to exclude all or part of that contribution from counting against their non-concessional cap and instead be counted against their CGT cap under section 292-105 of the ITAA 1997. An individual's lifetime CGT contribution cap is $1,780,000 for the 2022-23 year of income and it operates separately from the non-concessional contribution cap. Paragraph 292-90(2)(c) of the ITAA 1997 provides for certain types of contributions to be excluded from being considered a non-concessional contribution. One such contribution is a contribution covered under section 292-100 relating to certain CGT-related payments, to the extent that it does not exceed your CGT cap amount when it is made. Subsection 292-100(1) of the ITAA 1997 states that a contribution is covered under this section if it is: a) a contribution made by an individual to a fund in respect of the individual b) the requirement in subsections (2), (4), (7) or (8) are met, and c) the individual chooses to apply this section to an amount that is all or part of the contribution. Where an individual intends to disregard any capital gain resulting from a CGT event under section 152-105 of the ITAA 1997, (15 years exemption for individuals), subsection 292-100(2) of ITAA 1997 is the appropriate subsection to consider. The contribution must equal all or part of the capital proceeds from a CGT event. Paragraph 292-100(2)(b) requires the entity to make a payment to the individual before the later of: I. The day you are required to lodge your income tax return for the income year in which the CGT event happened; II. 30 days after the day you receive the capital proceeds The choice to exclude the contribution from being a non-concessional contribution will only be valid if it is made in the approved form and given to the fund on or before the time the contribution is made. In this case, the Agreement of sale for the Property of was established on Date A with settlement listed as 30 days from the property being unconditional, with a Finance clause being in place. The proceeds from the sale were made to the individuals on Date B. Selling or disposing of an asset will trigger a CGT event. Under subsection 104-10(3) of the ITAA 1997, the CGT event is when you enter the contract for the disposal of the asset - in this case on Date A.. The proceeds were paid to the Taxpayer, as the CGT individual stakeholder, on Date B. Accordingly, a contribution into superannuation to be considered exempt from under the 15-year small business exemption would need to be paid either 30 days after the payment was received on Date B or before the Taxpayer was required to lodge their individual tax return for that income year. While eligibility can be complex and contested, timing must still be respected. Lodging an objection with the ATO concerning if you qualify for the exemption, is not reason enough to extend the timing requirements under subsection 292-100(2) of the ITAA 1997. The Taxpayer has made the contribution into superannuation on Date C; therefore, the period for making the CGT small business 15-year exemption contribution has elapsed. Subsequently, the contribution the Taxpayer made to the Fund on Date C will be a non-concessional contribution. [1] ITAA 1997, section 152-105 [2] ITAA 1997 , section 152-10