C CGT small business retirement exemption

Did the SMSF receive personal contributions for the member that the member elected to exclude from their non-concessional contributions with a CGT small business retirement exemption?

Write at C the total value of personal contributions made by the member in 2020–21 that the member elected to exclude from their non-concessional contributions with a CGT small business retirement exemption.

To include an amount at C the SMSF must have received a valid Capital gains tax cap election from the member.

The CGT cap election is valid if:

• the member gave it to the SMSF on or before the date the contribution was made, and
• the SMSF has not been advised or become aware that the cap election is no longer valid or applicable.

The exemption from being a non-concessional contribution is not effective if the member made the CGT cap election after making the contribution.

There are two limits that affect the amount you include at C:

• The CGT small business retirement exemption lifetime limit – a member cannot elect to apply a CGT small business retirement exemption to more than $500,000 during their lifetime.
• The CGT cap – this cap limits the amount of exemptions that a member can claim through a CGT cap election during their lifetime. The amounts at C CGT small business retirement exemption and D CGT small business 15-year exemption both apply to the CGT cap. The CGT cap is indexed annually. In 2020–21 the lifetime limit for the CGT cap is $1,565,000.

Do not include amounts at C:

• if you are aware that a CGT cap election is not valid or that the election is not applicable (include these at B Personal contributions)
• that are in excess of the CGT small business retirement exemption lifetime limit or the CGT cap (include these at B Personal contributions).

If you become aware that a CGT cap election is not valid or applicable after you have lodged the SMSF annual return, you must lodge an amended annual return.

For more information, see:

• Small business retirement exemption
• CGT cap amount

Continue to: D CGT small business 15-year exemption amount