TD 2006/78A1 - Addendum
Income tax: capital gains: are there any circumstances in which the premises used in a business of providing accommodation for reward may satisfy the active asset test in section 152-35 of the Income Tax Assessment Act 1997 notwithstanding the exclusion in paragraph 152-40(4)(e) of the Income Tax Assessment Act 1997 for assets whose main use is to derive rent?
Please note that the PDF version is the authorised version of this ruling.View the consolidated version for this notice.
For CGT events happening in the 2006-07 or later income years
- amended the active asset test in section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997) by removing the requirement for the asset to be an active asset just before a particular time and modifying the period during which the asset must be an active asset where it is owned for more than 15 years; and
- amended the definition of active asset in subsection 152-40(1) of the ITAA 1997 to make clear that intangible assets inherently connected with a business carried on by a connected entity or a small business CGT affiliate can be active assets.
TD 2006/78 is amended as follows:
Insert after the paragraph:
17A. The amendments applied to this consolidated Determination apply to CGT events happening in the 2006-07 year or later income years.
active asset, both at a particular time and for half a particular period.
- for a total of at least half of the period specified in subsection 152-35(2) of the ITAA 1997 if you have owned the asset for 15 years or less; or
- for a total of at least 7 1/2 years during the period specified in subsection 152-35(2) of the ITAA 1997 if you have owned the asset for more than 15 years.
- In the first dot point omit 'paragraphs 152-40(1)(a) and (c)'; substitute 'paragraph 152-40(1)(a)'.
- In the second dot point omit 'you carry on'; substitute 'that is carried on by you, your small business CGT affiliate, or an entity connected with you'.
- ITAA 1997 152-35(2)
- ITAA 1997 152-40(1)(c)
This Addendum applies to CGT events happening in the 2006-07 income year or later income years.
Commissioner of Taxation
17 December 2012