Tax Planning Strategy 177 | Utilise the $1.445m CGT Cap

The lifetime CGT cap for 2017/18 is $1,445,000. This is available for capital gains that utilise the small business 15-year exemption or the small business retirement exemption. But only $500,000 can be contributed in respect of the retirement exemption. The contributions are not tax deductible to the taxpayer and not accessible to the super fund (they form part of the member’s tax-free component). 

The amounts contributed to super under the CGT cap are in addition to amounts that can be contributed under the concessional and non-concessional super contribution caps. In addition, such a contribution can still be made even if the fund member has a ‘total superannuation balance’ greater than $1.6 million. This strategy maximises the funds going into the most tax effective investment structure, i.e. a super fund (where the tax payable can be zero).