Edited version of private advice

Authorisation Number: 1051561195607

Date of advice: 5 August 2019

Ruling

Subject: Small business CGT concessions

Question

Can you disregard the capital gain made on the disposal of the Property under the small business 15 year exemption?

Answer

Yes. You won't have an assessable gain on the sale of the active asset as you have met the basic conditions, are over 55 years old and you have owned the active asset for more than 15 years. The Commissioner also considers that the CGT event has happened in connection with your retirement. Further information can be found by searching 'QC 52288' on ato.gov.au

This ruling applies for the following period:

Year ended 30 June 2019

The scheme commences on:

1 July 2018

Relevant facts and circumstances

The Company operated a business.

Both you and your spouse were employees of the Company and were paid an annual wage.

The Company directors are you and your spouse.

You purchased the Property in 1988. Since the Property was purchased it has been used to conduct the operations of the business which the Company carries on.

The Property has never been used for any other purpose then to operate the business.

The Company ceased operations on the date of settlement of the sale, as you and your spouse wished to retire.

There has never been any private use of the Property and the Property is exclusively used for the Company trading operations.

The Property was sold during the year ended 30 June 2019.

The turnover of the business for the year ended 30 June 2018 was under $2 million and the Company's projected turnover for 2019 was under $2 million.

The Company does not own any other entities or investments. Additionally, you and your spouse do not directly or indirectly own any other entities (trading and non-trading).

The net value of the assets owned in total by you and your spouse are in excess of $6 million net market value.

You and your spouse have not utilised the small business concessions previously contained within Division 152 of the ITAA 1997, and thus you have not utilised any of the small business CGT lifetime cap amount.

You and your spouse were aged over 55 at the time of the CGT event.

You do not carry on any business in their own name nor does your spouse.

The sale of the Property has resulted in the closure of the business. The business has been operating continuously since inception in 1988 at the Property.

You and your spouse retired immediately following the sale of the Property on settlement date.

You do not intend to work again.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 103-5

Income Tax Assessment Act 1997 Section 104-10

Income Tax Assessment Act 1997 Section 115-5

Income Tax Assessment Act 1997 Section 115-10

Income Tax Assessment Act 1997 Section 115-25

Income Tax Assessment Act 1997 Subdivision 152-A

Income Tax Assessment Act 1997 Section 152-10

Income Tax Assessment Act 1997 Subsection 152-10(1)(a)

Income Tax Assessment Act 1997 Subsection 152-10(1b)

Income Tax Assessment Act 1997 Subsection 152-10(1AA)

Income Tax Assessment Act 1997 Subsection 152-10(1A)

Income Tax Assessment Act 1997Section 152-35

Income Tax Assessment Act 1997 Section 152-40

Income Tax Assessment Act 1997 Subdivision 152-B

Income Tax Assessment Act 1997 Section 328-110

Income Tax Assessment Act 1997 Section 328-115

Income Tax Assessment Act 1997 Section 328-125

Income Tax Assessment Act 1997 Section 328-130

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