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Edited version of private ruling
Authorisation Number: 1011821939969
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Ruling
Subject: Repayment of capital proceeds from sale of business
Question
Will the capital proceeds received from the sale of your business be reduced by a repayment?
Answers
Yes.
This ruling applies for the following period
Year ended 30 June 2010.
The scheme commenced on
1 July 2009.
Relevant facts
You sold your business in 2010.
A condition of the contract was you were required to work in another business.
In 2010 you requested the terms of the contract be reconsidered.
In 2010 you made a repayment in relation to the proceeds received from the sale of the business.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 116-50
Reasons for decision
The capital proceeds from a capital gains tax (CGT) event will be reduced by any amount that you repay or any compensation you pay that can reasonably be regarded as a repayment of part of the capital proceeds.
In this case, you repaid an amount in relation to the proceeds received from the sale of your business. This repayment will reduce the capital proceeds received from the sale of your business in 2010. You will need to amend your income tax return to reduce your net capital gain as a result of the reduction in capital proceeds.
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