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  • 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.


    Jodie ran a florist business from a shop she owned for eight years. She ran the business for five years, and then leased it to an unrelated party for three years before selling. The shop satisfies the active asset test because it was actively used in Jodie’s business for more than half the period of ownership, even though the property was not used in the business just before it was disposed of.

    End of example

    Find out about:

    See also:

    • Requesting an extension of time 
    Last modified: 11 Jul 2019QC 52271