| 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: 1051817122170
Date of advice: 18 March 2021
Ruling
Subject: Small business concessions - 15-year exemption
Question
Does the property satisfy the active asset test in section 152-35 of the Income Tax Assessment Act 1997 (ITAA 1997)?
Answer
Yes. You owned the asset for more than 15 years and for more than 7 ½ years during the period of ownership, a substantial proportion of the property has been used in the course of carrying on a business. As the property has been used for more than half of the ownership period in business, a significant individual is 55 or over at the time of the CGT event, and the event happens in connection with their retirement, , it has satisfied the conditions to apply the 15 year exemption
Further information on the active asset test can be found by searching 'QC 52271' on ato.gov.au
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
A company was established to provide business services and a property was purchased.
The company has a sole director who is over 55 years of age. The director lives in the property where a percentage of floor area is used for private use. The director is making plans for retirement and will be purchasing the property and winding up the business.
The property has two separate buildings with business signage and street parking available to clients. One building is solely used for business activities and the other has a shared entrance for private and business usage.
One building is used for storage and filing of paperwork. The studio/office and computer equipment are used to produce print materials for business clients.
There is a specific workspace/office set up in the property solely for business activities and used for meetings with clients and suppliers. Business is undertaken at the property as well as meetings, training and customer visits.
The property is yet to be sold and is still being used for business purposes.
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
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).
