| Disclaimer You cannot rely on this record in your tax affairs. It is not binding and provides you with no protection (including from any underpaid tax, penalty or interest). In addition, this record is not an authority for the purposes of establishing a reasonably arguable position for you to apply to your own circumstances. For more information on the status of edited versions of private advice and reasons we publish them, see PS LA 2008/4. |
Edited version of private advice
Authorisation Number: 1051805396337
Date of advice: 17 February 2021
Ruling
Subject: Income tax - small business concessions - 15 year exemption
Question
Do you satisfy the conditions to apply the capital gains tax (CGT) small business 15-year exemption in section 152-105 of the Income Tax Assessment Act 1997 (ITAA 1997) to the gain made from the sale of properties?
Answer
Yes.
In your case, we consider that you satisfy the conditions to apply the small business 15-year exemption to the sale of the three properties. You were a small business entity in the income year in which the CGT event occurred, and the properties satisfy the active asset test. You owned the properties over 15 years and you permanently incapacitated at the time of the disposal. The capital gain upon the sale of the properties is therefore disregarded.
This ruling applies for the following period:
Year ended 30 June 2021
The scheme commences on:
1 July 2020
Relevant facts and circumstances
The Public Trustee has been appointed as the administrator of your financial matters.
You have ownership interests in three properties.
You were in a partnership that undertook a business activity.
The Deed of Family Arrangement states that the partnership commenced in XXXX and the partnership ended with lodgement of the Deed of Dissolution of Partnership with the Dissolution date XXXX.
Person XXXX is in the course of purchasing the properties 1, 2 and 3.
Based on the information provided, the net capital gain is estimated to be $XXXX for property 1 and 2, and net Capital Gain of $XXXX for property 3.
The maximum net asset value of the partnership is less than $6 million.
The partnership's turnover has been less than $2 million.
The properties were used by the related partnership to carry out the business activities.
You are permanently incapacitated.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-10
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 section 152-40
Income Tax Assessment Act 1997 section 152-105
Copyright notice
© Australian Taxation Office for the Commonwealth of Australia
You are free to copy, adapt, modify, transmit and distribute material on this website as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).
