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Edited version of private advice
Authorisation Number: 1052095142979
Date of advice: 30 March 2023
Ruling
Subject: CGT - small business concessions
Question
Does the property satisfy the active asset test in section 152-35 of the Income Tax Assessment Act 1997?
Answer
Yes. You have owned the property for more than 15 years and it was used in a business carried on by your affiliate for more than 7.5 years. As such, the property satisfies the active asset test.
This ruling applies for the following period:
Year ended 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You acquired an ownership interest in two adjoining properties more than 15 years ago. One property contained dams, a hayshed, stockyards, and a loading ramp.
A sibling owned another adjoining property.
From for more than 7.5 years, your sibling and their spouse ran a business in partnership using the 3 adjoining properties.
There were no fences between the 3 properties, only a boundary fence around the external perimeter of the properties. Cattle were free to roam between the 3 properties and you allowed your sibling to run the maximum head of cattle the properties would support.
Weekly discussions were held regarding the use of the land, the condition of the land and the cattle, the cattle market, and the timing for sales.
All activities were undertaken as part of the larger family commitment.
There was no formal agreement between the siblings, only a verbal agreement to run cattle across the combined properties.
No rent was paid by your sibling for the use of your land.
You sold your ownership interest in the land.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 152-35
Income Tax Assessment Act 1997 subsection 328-130(1)
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