Active asset test

A CGT asset is an active asset if you own it and:

• you use it or hold it ready for use in the course of carrying on a business (whether alone or in partnership)
• it is an intangible asset (for example, goodwill) inherently connected with a business you carry on (whether alone or in partnership).

The active asset test is satisfied if the asset was an active asset of yours:

• for a total of at least 7½ years during the test period, if you've owned it for more than 15 years, or
• for at least half of the test period, if you've owned it for 15 years or less.

The test period:

• begins when you acquired the asset, and
• ends at the earlier of
  • the CGT event, and
  • when the business ceased, if the business in question ceased in the 12 months before the CGT event (or such longer time as the ATO allows).
   

The periods in which the asset is an active asset do not need to be continuous. However, they must add up to the minimum periods specified above, depending on the total period of ownership.

The asset does not need to be an active asset just before the CGT event.

Find out about:

• Meaning of active asset
• Spouses and children under 18 years
• Land subdivision and active asset test
• Businesses that are winding up
• Death and the active asset test
• Continuing time periods for active asset test for involuntary disposals
• Modified active asset test for CGT event D1
• Additional conditions if the CGT asset is a share or trust interest

See also:

• Requesting an extension of time