TD 2007/14A2 - Addendum
Income tax: capital gains: small business concessions: what 'liabilities' are included in the calculation of the 'net value of the CGT assets' of an entity in the context of subsection 152-20(1) of the Income Tax Assessment Act 1997?
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For CGT events happening in the 2007-08 income year or later income years
- increased the maximum net asset value test threshold in section 152-15 of the Income Tax Assessment Act 1997 (ITAA 1997) from $5 million to $6 million,
- replaced the term 'small business CGT affiliate' with 'affiliate', moved its definition from section 152-25 of the ITAA 1997 to section 328-130 of the ITAA 1997 and changed its meaning in some respects, and
- enacted the small business entity ($2 million turnover) test as an alternative to the maximum net asset value test as a means of qualifying for the small business capital gains tax concessions.
TD 2007/14 is amended as follows:
(a) In the second column of the calculation, against the item 'Freehold premises in Parramatta', omit '3,500,000'; substitute '4,500,000'.
(b) In the third column of the calculation against the item 'Freehold premises in Penrith', omit '6,300,000'; substitute '7,300,000' and against the item ' Net value of CGT assets: ' omit '4,800,000'; substitute '5,800,000'.
In the fourth sentence omit '$5 million'; substitute '$6 million'.
In the second sentence of the paragraph, omit 'small business CGT'.
Omit the calculation; substitute:
|Net value of CGT assets of Cassandra||$1.0m|
|Net value of CGT assets of Fancy Foot Pty Ltd - Studio: ($6m less $0.5m)||$5.5m|
|Net value of CGT assets of Wanadance Pty Ltd - Warehouse: ($2m less $2.8m)||($0.8m)|
|Total net value of CGT assets:||$5.7m|
In the first sentence omit '$5 million'; substitute '$6 million'.
Omit the paragraph; substitute:
15. To qualify for the small business CGT concessions, at least one of the conditions in paragraph 152-10(1)(c) must be satisfied. One of these conditions is the maximum net asset value test in section 152-15. Under this test, the net value of the CGT assets of the taxpayer and certain related entities must not exceed $6 million just before the relevant CGT event.
- ITAA 1997 152-25
- ITAA 1997 328-130
- Taxation Laws Amendment (Small Business) Act 2007
Commissioner of Taxation
15 April 2014
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